Does it seem like everyone has someone else’s interests in mind when you go through a business loan process? Not-so-breaking news: your banker works for the bank.  Likely a decent person, but the bank pays their bills.  Yeah, bankers might make a little more when they book a credit deal, but they need to SELL YOU the deal to get paid, REGARDLESS of how unfriendly the final terms and conditions are.  You needed $350,000 and underwriting countered at $250,000?  It is the banker’s literal job to convince you this is still a good deal in your best interest.  They have ZERO incentive to say, “Ya know what?  I disagree with underwriting on this and I wouldn’t accept this deal if I were you.  Here’s a buddy at another bank that might be able to get you better terms.” 

 

Not only are they not incented to act in this year, but they have a boss, and their boss has a boss, and so on up the hierarchy all pushing the banker to close the deal.  “The team is counting on this one.  We need it to hit our quarterly target.  Let me (mid-tier banking exec) talk to the customer to help you close this one.  Remember to use the Incentive Calculator to see how much this impacts your pay!” 

 

Bankers aren’t monsters.  It’s nothing against you.  But at the end of the day, bankers work for a corporation, maybe with shareholders, certainly with stakeholders, and everyone needs to justify salaries and keep the lights on, plus a little extra.

So who’s in your corner?  Say you hire a business lending broker.  Best case scenario, they require a percentage from you once the deal is closed.  Typically, the fee falls between 1-2%.  So if you need $200,000, that’s potentially $4000 right off the top.  Are you willing to pay $4,000 to have someone handhold you through the lending process and match you up with a bank? 

 

Think about this:  Brokers, just like real estate agent gets paid when the deal closes.  The agent/broker isn’t incented to find you the absolute best deal. (Freakonomics covered this perfectly).  Brokers have just as much incentive to convince you to accept the offer as the banker: brokers get paid when your deal funds! End of story.  If it takes 5 hours and 2 weeks, or 10 hours and a month, the broker takes the same fee from you.  Are you expecting brokers, out of the goodness of their hearts, to spend double the amount of time and effort for the same personal financial result?  Again, not inherently shady people, but monetary incentive structures influence behavior.

 

The third option?  Alternative lenders – the wild west of business lending.  Totally unregulated, non-standard terms and disclosures, virtually no scrutiny.  Some are better than others, for sure.  It’s fast, it’s easy…and it’s expensive!!  Double digit interest rates, 39% merchant cash advance funding, fees and interest baked into the loan. It gets messy.  But, it sure is fast and easy!

 

But what if we took the essential part of the broker model, the knowledge of underwriting guidelines and industry standards, and handed that knowledge over to you?  What if you knew most of what they knew?  Would you still pay 2% for the handholding?  Or would you do what you have always done?  Find out what you need to know and get after it. 

 

If you knew, objectively, from a third party professional, with no financial incentive to steer you one way of the other, about the strength of your credit request, what to watch out for and, most importantly, what to ask your banker on DAY ONE, would you take control and handle it in house?  Armed with underwriting industry insight, and the right questions, I bet you can find a great deal on your own.

 

Here’s my proposition:  You tell us what you are looking to accomplish and how much money you’ll need.  We review your financials and discuss your plan.  Then we tell you, specifically, the strengths/risks/mitigants of your deal.  We give you a simple, tailored, actionable list to prepare plus questions to ask any business lender you encounter.  If you don’t hear the answers you want right off the bat, you move on to the next.  Know your approval odds, and know what rate/terms your business deserves.

 

Ready for a tangible example?  If you reduce a $100k loan rate from 8% to 6.5%, you’ll save about $4200 over 5 years!  What’s that worth to you?  Should be worth a couple hours of your time and a few hundred bucks.  You pay a flat $279, and we will meet with you, dissect your deal, give you the tools you need to succeed, and point you in the right direction. 

 

Our team has over 100 years combined business lending experience.  We aren’t brokers.  We don’t work for banks.  We’re not alternative lender affiliates.  We have no financial incentive to move a deal through quickly.  CircumFi delivers personalized, clear, easy to implement advice so you can save thousands.  We work for you, and only you, at a flat rate.