The word “broker” covers an enormous amount of ground.
At one end you have people who genuinely understand five or six product areas, know which lender does what this month, and will happily talk you out of a deal that doesn’t suit you. At the other you have websites that collect your details and sell them on to whoever pays most that week.
Both call themselves brokers. Telling them apart takes about ten minutes and a handful of questions.
The tell: what they ask before they suggest
A good broker’s first move is questions. What does the business do? Who are your customers and how do they pay? What’s on the balance sheet? What’s the money for and when does it need to land? What have you already tried?
A poor broker leads with the product. If someone recommends a facility before they understand your debtor profile, your asset base or your seasonality, they aren’t matching a solution to you. They’re matching you to whatever they sell.
The same applies to speed. “We can have you funded in 24 hours” is a statement about their process, not about whether that funding is right for you.
Questions worth asking
Are you authorised, and how? Some commercial brokers are directly FCA authorised, some are appointed representatives, and much commercial lending sits outside the FCA perimeter entirely. Ask which applies. Ask for the firm number if they have one and check it on the Financial Services Register.
Are you a member of a trade body? NACFB and FIBA membership means a code of practice, professional indemnity requirements and continuing professional development. It isn’t a guarantee of quality, but it does mean someone independent is checking. Compare Your Funding holds both, and we’d encourage you to ask any broker the same question before you hand over your accounts.
How are you paid? There are three models: commission from the lender, a fee from you, or both. None of them is wrong. What matters is that you’re told, in writing, before you commit. If a broker is evasive on this, or if the fee arrives as a surprise at offer stage, that’s your answer.
Also ask whether commission varies between lenders on their panel. If it does, ask how they manage that when recommending one over another. A confident broker will answer this without flinching.
Which products do you place regularly? Everybody’s website lists everything. Ask how many invoice finance facilities they’ve placed this year. Ask when they last did a trade finance deal, or a development exit, or an asset refinance. Volume in a product area is the difference between a broker who knows the underwriter’s actual appetite and one who’s reading the same website you could read.
How many lenders will you approach, and in what order? This matters more than people realise. Scattering your application across twenty lenders leaves credit search footprints, and once a case has been declined by half the market it becomes markedly harder to place, even by a lender who’d have said yes if approached properly first. A good broker approaches a shortlist deliberately, in a sensible sequence, having already worked out who’s likely to say yes.
What happens if this doesn’t work? Ask what they’d do if the first choice declines. A broker with a real plan B has thought about the case. One who hasn’t will improvise, usually by sending it everywhere at once.
Why packaging changes the answer you get
Two identical businesses can get different decisions from the same lender depending entirely on how the case arrives.
A well-presented proposal explains the business, addresses the obvious concerns before the underwriter raises them, and includes the documents needed rather than the documents that happen to be handy. A poorly presented one arrives as an email with three attachments and a hopeful tone.
Underwriters are people with a queue. Making their job easy genuinely improves your outcome, and it often improves your terms too, because a clearly explained business reads as a lower risk than an unexplained one.
That packaging work is a large part of what you’re actually paying a broker for. It’s not glamorous, but it’s where the value sits.
Signs to be wary of
- A significant upfront fee with no clear deliverable attached to it. Fees for genuine work are reasonable. Fees for “processing your application” less so.
- Only ever recommending one product type. Some firms are excellent specialists and will say so. Others simply have one shelf.
- Pressure and deadlines that come from the broker rather than from your situation.
- Reluctance to explain the downside, the exit costs or the guarantee position.
- No visible trading history, no registered address, no named people.
- Terms that appear at the last minute, when you’ve already committed emotionally and can’t easily start again.
What good looks like after the deal
The measure of a broker isn’t the day the money lands. It’s the year afterwards.
Do they check in before your invoice finance renewal, when there’s time to test the market, rather than three weeks before the notice period expires? Do they tell you when a lender’s rates have moved and yours haven’t? Are they contactable when something breaks?
The awkward conversations are the real test. A broker who calls to say “this deal is available but I don’t think you should take it” is worth considerably more than one who never says no. Turning down a case costs them money in the short term. That’s precisely why it’s the strongest signal of how they’ll treat you over time.
The short version
You want somebody who understands your business before they mention a product, who knows more than one corner of the market, who tells you how they’re paid without being asked twice, and who approaches lenders deliberately rather than in bulk.
That’s a fairly low bar. It’s surprising how many firms don’t clear it.
Put the questions above to Compare Your Funding and you’ll get straight answers to all of them. Put them to anyone else and you’ll learn something useful either way, which is rather the point.
About Compare Your Funding
Compare Your Funding is an independent commercial finance brokerage based in Stockport, registered with both FIBA and the NACFB. We arrange invoice finance, asset finance, property and bridging, trade finance and business loans, and we’re straightforward about how we’re paid. Compare Your Funding is a trading style of TGL Solutions Limited.
compareyourfunding.com · 0161 871 9840 · [email protected]
