Why a Loan Broker?
Why is it better to utilize a business loan broker/consultant and not just go direct to your local bank?
- Most local banks, including the largest banks in the country, are not pro small business and aggressive. They simply don’t want to take on risk.
- Going direct to a local bank means you have to “package up” your loan to present to them. Most loans get declined because the loan package is not complete, has errors or is not with the right bank.
- A loan broker will have access to many banks and will know which ones the best match depending on where you live, the industry your business purchase is in, the size loan, the strength of the overall loan request.
- A loan broker will work together with you to make sure your strengths are properly documented. The 3 year loan projections are realistic, the business plan highlights certain areas and that there is a strong cover page and overview that will “sell” your loan request to maximize your chances with a targeted bank that has a track record with the broker for your loan request.
- A loan broker can potentially get you approved and funded with a lower down payment and cash outlay.
- A loan broker can “protect” collateral and allow for a loan funding using less of your personal collateral, which will put you in better position for future business expansion.
- All banks will eventually change their loan requirement and “box” and loan size, but a loan broker will have an updated diversified list of bank and various loan products and programs.
- A local bank can change loan terms prior to approval or before funding, or provide bad service and take too long, which can kill your deal, upset the seller and cost you time and money.
- A good loan broker will avoid all of that, will make sure your loan moves along the funding process and has back up lenders if a bank does play games.
- Most SBA Banks don’t want to go below $400K or $350K loan sizes on SBA and conventional because their profit margin is lower and “not worth” their time. A loan broker will have several banks that can go as low as a $150K loan size and who is very pro-franchise.
- A loan broker will take the time to properly pre-qualify the business for sale financials and pre-qualify the buyer/borrower and put it in writing to not waste anyones time. Many banks don’t do this or will provide a non-approval term sheet but will then not follow up with an actual approval.
- A loan broker will work on your behalf, not the bank, and will be your advisor and coach and will oversee and manage your loan until funded. If you go direct to a bank, you are at their mercy and they are mainly looking at reasons to not approve your loan. A loan broker’s lender base is looking for reasons to do your loan!
- A loan broker’s main motivation is to get your loan funded, that’s where their main commission is made. Working directly with a banker doesn’t have the same motivation and gets paid his salary whether he gets your loan funded or not.
- Most loan brokers stay in business because of their clients repeat business and referrals, more so than a direct banker.
About Don Johnson
Don Johnson has over 25 years of business ownership experience having owned and sold two successful businesses. Don has been involved in business and franchise lending for over 20 years as an owner of Diamond Financial (New Jersey office) as well as Principal and Director of Business Development for A. B. Nicholas, LLC, a specialty lending firm. Don has assisted thousands of people nationwide in achieving their business funding goals, assisting entrepreneurs for start-up businesses/franchises, expansion and working capital requests, as well as financing business acquisitions with both SBA and non-SBA loan programs, achieving high success rates, currently working with hundreds of franchise companies, business broker firms and other business lending professionals. Don and his companies are known nationally, and he is regarded as an expert in franchise and business lending, as well as alternative financing. He graduated from Fairleigh Dickinson University. Don is married, has 2 children and resides in central New Jersey.
Client Testimonials
"We recommend Don and his team at Diamond Financial to all of our Franchisees that are looking at owning a JDog Junk Removal & Hauling or JDog Carpet Cleaning Franchise. They do a great job of getting our Franchisees the capital to start their own business. They are simply much more reliable and have more funding programs that a local bank does."
“I have been working with Diamond Financial Services for the past 15 years on the sides of the franchisor, Regional Developer, franchisee, and as a franchise consultant with several prominent brands. There’s a reason why it has been 15 years. Consistency, funding creativity, responsiveness, and trustworthiness. It’s tough to build a business or relationship without these traits”.
“Thank you Diamond Financial!
I really can’t thank everyone enough for giving me this incredible life changing opportunity and believing in me and my dream.
It’s now going to become a reality and it’s all thanks to great people like you and please know I’ll never forget it and always be so thankful.
I’ll keep you all updated as the build goes on! And hope to see you as we open finally in a few months!
Thank you!”
Working with Diamond Financial for my franchise funding was an absolute breeze. Their expertise and personalized approach made the process seamless, and I felt supported every step of the way. I highly recommend Diamond Financial to anyone looking for a smooth and efficient franchise funding experience.
