Business Loans

Many Business Loan Brokers Are Double Dipping – It could Cost you

The business lending industry has undergone a dramatic shift in the past few years, but most finance brokers are yet to adjust.

Today’s business loan applications are very simple to complete and are normally done entirely online.

Despite this, finance brokers are double dipping on fees.

When a small business owner talks to a finance broker, the first thing they’re often asked to do is sign a mandate contract. The small business owner is told this is required to give the broker permission to act on their behalf, so they can find the finance.

What they often don’t say is that a mandate prohibits the client from seeking finance from another broker, or even directly from a lender for a certain period of time. Furthermore, the contract nearly always includes a mandate fee of up to 4%. It gets charged when the finance is delivered.

The issue is that the broker charging a mandate fee to the client is ALSO receiving up to 4% commission directly from the lender, and they’re not required to disclose to this to the you.

Also, brokers earn more by seeking finance from lenders offering the highest commission rate at any given time, and they’re not required to provide clients with any choice at all.

There are some cases when large business finance applications and solutions can be complicated and time consuming, which makes using an experienced commercial broker crucial. In these cases, it’s fair and reasonable for the broker to charge the client a fee for services, even though they’ll also be receiving a commission for the deals.

But these days the majority of business loans are simple and quick. So, what should you do when you need finance for your business and you can’t visit the bank?

The answer is simple; visit www.ebroker.com.au  the only 100% free, transparent and unbiased non-bank business loan finder. Alternatively, visit the lenders’ websites directly.

All the new age Fintech business lenders offer simple online application processes and super-fast customer service.

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