Going directly to the bank saves money by avoiding the use of an intermediary. While this logic makes sense on some levels, you may be shocked to hear that making use of a broker to help you with your commercial property loans can save you money.
In this post, we’ll look into commercial loans in depth. We’ll also look into ways you might save money by using a broker rather than going directly to the bank. Let’s get this party started.
Ways for Acquiring Loans
You have three possibilities when looking for a commercial loan:
- Go straight to the bank.
- Shop around on your own.
- Hire a broker to do the legwork for you.
Let us begin with the bank.
Going to the Bank Directly
Working with a bank where you already have an account can be easy, but that doesn’t guarantee a fast loan procedure or that the product or structure is the best fit for your needs. In fact, because most banks distribute responsibility among several different personnel, loan applications frequently fall through the gaps and delay.
Shopping for Yourself
How much time do you have available to research lenders and build new relationships? Do you want to spend all of your time on the phone obtaining information about interest rates, loan requirements, and fees on top of everything else that comes with property investing? Most people don’t have the time to search for the best commercial loans for their projects, nor do they have contacts in the lending industry that can assist them in locating what they’re searching for.
Using a Broker to Do Your Shopping
A broker can help you get the best loan for your commercial investment property. A reputable and experienced broker will already have established contacts in the financing business and will be able to identify the greatest fit for you. Over the life of the loan, the appropriate loan can save you tens of thousands of dollars.
How a Loan Broker Can Help You
A broker can help you save time and secure the best loan for your commercial property. In this section, we’ll look at some of the specific advantages of utilising a broker’s experience.
Brokers Get Better Rates
With over so many lenders in Australia, loan competition is fierce. Lenders seek reliable loans and rely on brokers to provide them to them. As a result, lenders provide discounted interest rates to brokers they want to engage with, and you can benefit from these low rates.
When you go to a bank as an individual, you’ll obtain a regular rate. Even if you already have a relationship with the bank because you have a checking or savings account with them, they don’t have much motivation to provide you with a low, low rate. However, if you use a good broker, the banks will lower their prices to attract traffic through your broker.
Brokers Offer a Variety of Options
Banks are only able to offer their own loan packages, which may or may not be suitable for your project. Furthermore, with dozens of lenders to select from, you’re unlikely to visit all of them.
A broker, on the other hand, has quick access to a network of lenders and a wide range of loan packages. The ideal loan for you is somewhere within these possibilities. When you apply for loans that you do not qualify for, your broker can save you a lot of time as well as unwanted pings on your credit.
Brokers Understand Credit
Bank policies are extremely rigid. When it comes to credit and bank loans, there isn’t much nuance to be found. When negotiating with a bank, complexity frequently leads to delays, and real estate delays seldom end nicely.
Brokers, on the other hand, understand that the presentation of your loan application can be the difference between approval and rejection. They have the knowledge to spot policy exceptions and can negotiate with the loan officer in charge of your loan.
Bottom-line
It’s reassuring to know that you have someone on your side who is looking out for your best interests and will see the process through. Your broker allows you to prioritise other tasks, such as choosing your next investment property or working on renovations.
