Commercial Brokers - How to Avoid Them And Raise Capital Fast
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If you are looking to raise commercial finance for your business, it may be that you are considering going through commercial brokers. This could be to extend your short term credit line, to help manage cash flow fluctuations, or it could be to help pay for new equipment, or an increase in staff.
So what exactly do commercial brokers provide, and could there be other options for commercial finance that would be worth your while investigating?
A commercial broker is in the business of providing a bespoke service to their clients in arranging commercial finance. Commercial mortgages are their bread and butter, and it is for these that many businesses employ commercial brokers. But their repertoire has increased of late, to cover bridging finance, debt refactoring, invoice discounting and asset based finance options.
Given the complexity of some of these options, and the large number of providers of different financial products, having commercial brokers to call on to assess, recommend, and arrange your financing can seem like an attractive option. You can avoid getting dragged into time consuming investigations, and comparisons, of what is on out there in the commercial finance market.
But there are difficulties with going through an intermediary. Commercial brokers do not have direct access to funds- they are arranging financing with third parties, usually banks or credit houses. This means they are very dependent on the state of the credit markets. And as we all know, credit conditions are pretty tight right now.
The association representing commercial brokers, the NACFB (National Association of Commercial Finance Brokers), reported a massive funding problem in their 2009 assessment of the market, with a 60% year on year fall on services they could arrange. Given the persistence of the tight credit market and continuing high spreads, commercial brokers will likely struggle to get access to affordable credit.
In addition, arranging your commercial finance through commercial brokers will inevitably involve some delays - and as noted above, there is no guarantee that a suitable product will be found. When you need funds quickly, such delays may be impossible to countenance.
Finally, there is a high cost when you go through commercial brokers. Their fees can be quite expensive, and they may be being paid commission on the deals they organise. All of the financial solutions they offer will involve a substantial and ongoing cost in the form of debt repayment and interest payments.
There is, however, another approach you could look into - SellMyCommercialProperty are experts in commercial property, with direct access to substantial funds. Our team of professionals have a great deal of experience in arranging 'sale and rent back' deals- these can release funds fast, whilst allowing you security of tenure in your current premises. Your commercial property will be purchased quickly and for a fair price, and then SellMyCommercialProperty will lease it back to you.
All of this will be much quicker going through commercial brokers, and your funds will be passed over to you without fees, or interest being deducted. Get in touch with SellMyCommercialProperty and we will be able to help you change the way commercial financing works for you.
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