When we broker a loan for a client, we receive a payment from the lender for bringing them that loan. This is a very much a win-win-win situation, in our view. The client can access the services of an experienced lender to help them weave through a complex world, with no upfront fee; the lender only pays for loans they actually write which reduces their sales and overhead costs; and the broker receives due payment for their services.
However, not all loans are created equally. Some lending deals can take considerable time to put together and require a lot of time, effort and expertise to get across the line. Many brokers shy away from these more difficult deals and focus only on the easy wins. We prefer an approach that allows us to cover all our client’s needs, not just what works for us.
To make this process commercial, we have developed our own bespoke pricing guide for our lending and finance clients. This model identifies what we believe are the key lending variables and works on a ‘shading in’ basis.
The majority of our lending deals, under this model, will attract no upfront fee. Some will attract a modest fee where we have to put in more time and effort, some will attract a larger fee where we have to put in a lot of time and effort.
We are confident that under each and every scenario within our model, we will deliver a benefit which far exceeds our fee. In many cases this will also involve us actually being able to get the deal done when others choose not to.
We will ultimately apply our professional judgement before issuing a formal proposal and judge each deal on its own merits. Whilst this model is a very useful guide, it remains a guide only.