invoice factoring partner

How Brokers Can Identify the Right Invoice Factoring Partner

07:19 13 March in Blog, Broker Resources

As a financial services broker, identifying the right partners is essential. Too often, brokers offer leads to providers of financing and find themselves on the outside looking in. Therefore, identifying capable and trustworthy invoice factoring partners early in your career is essential.

Most brokers are looking for an ongoing relationship that does not cost them future revenue; exceptional communication between the funding company and themselves; training when needed; and tools to help them maximize their business potential.

This model holds regardless of the amount of business the broker is referring and which products they need to meet the needs of their clients. That is why for years, brokers have learned to rely on Capstone.

Capstone Values Broker Relationships

If your business focuses on small companies and embraces minority-owned firms, you need a trusted partner. Your clients’ needs come before anything. You often seek opportunities to provide them with unique methods of obtaining the cash they need to keep their business functioning. Some of the ways Capstone demonstrates their commitment to broker relationships include:

  • Custom packages for your clients – every customer has unique needs and we will work with you and with your client to make sure we offer them a package that meets those needs.
  • Local services – regardless of where your client is located, we can help.
  • Regular commission checks – if we are doing business with your customer, you will get a regular commission check from us.
  • Training – you need never worry about any uncertainty with our products. We provide you with training, educational materials, and brochures, so you know which products you can safely offer.

If you are looking for a partner you can trust to help you grow your business by assisting your customers, today is the day to reach out to Capstone. Contact Capstone Capital Group today at (212) 755-3636 and see how we can enable you the opportunity to grow your own business while providing your clients with the financing they need to grow their businesses.

business finance broker investing

Business Tips: Invest in Brokers

09:38 14 October in Blog, Broker Resources, Business Funding

Some finance companies prefer to work directly with clients and avoid working with brokers. Capstone takes a different approach to dealing with brokers, we invest in their success. There are practical business reasons to taking this approach with a financial broker including the opportunity to develop a long-lasting relationship.

Why Brokers Matter to a Finance Company

The most effective marketing program will not reach every person who could use the type of financing you are offering. Simply stated, working with brokers makes sense for every financial institution since it grows their potential market. Brokers can direct the clients who best fit your market directly to you and making sure they are well-educated in your products and processes makes good business sense.

Investing in Brokers Makes Business Sense

New clients help you grow your business. Reaching out to financial brokers is a plus because many businesses use brokers to help them find necessary business services. If you take the time to train the brokers about your processes including how you review applications, what financial criteria you use to determine eligibility, and the types of businesses you typically fund, you will spend less time on new applicants. This allows you to continue growing and targeting those businesses you are most likely able to help.

Relationship Building and Financing

Before a company feels confident dealing with a new financing method or financing company, they must feel comfortable with the people they are dealing with. In many cases, a company will have been working with financial brokers on an ongoing basis to deal with a broad range of financing needs. Given they have an established relationship, clients are more likely to feel confident about going to a new source of funds when the broker has an existing relationship with them.

How to Invest in Brokers

Investing in brokers is about education more than money. While every finance company should agree to basic principles such as ongoing fees to brokers if their client remains an active borrower, there are other ways to invest in these relationships. At Capstone, we are committed to our relationship with every broker and because of that, we offer the following to every broker we deal with:

  • Training – we believe a well-trained broker can grow their own business, their client’s business, and our business. That’s why we spend time training each broker on the products and services we offer.
  • Educational Materials– we make sure each broker we work with has the educational material they need to inform themselves, as well as their clients about the range of products we offer.
  • Brochures – while word of mouth advertising is always the most direct, we also understand having high-quality printed materials available for customers is sometimes a necessity. Our brochures are available to every broker who wants them to share with new brokers or with their clients.

Once a broker has started working with Capstone, they get a monthly accounting of all activity from their clients. We believe this type of transparency is important as it helps us develop strong relationships across our broker base. Additionally, we put no caps on a broker’s earning capacity: As long as their customer uses a Capstone product, the broker receives a commission on every dollar we finance. We believe this is a winning solution for us, for clients and for the brokers who represent those clients.

Capstone Group has a variety of programs designed to help brokers succeed because we believe brokers help their clients succeed. A successful broker helps raise the viability of their clients, and we believe our relationship with brokers is one of the reasons why we have continued to be able to supply customized solutions to small and mid-sized businesses across the United States.

7 Things Clients Look for When Choosing a Brokerage

7 Things Clients Look for When Choosing a Brokerage

15:16 24 July in Broker Resources

Working with financial intermediaries offers business owners many advantages. Primarily, a financial intermediary can help you identify the right funding mechanism for your needs. Whether a business needs help with leasing equipment, securing lines of credit, or help identifying a financing partner, an intermediary can be an asset. However, as a financial intermediary, you should understand what clients are looking for and make sure you are meeting their needs.

1. Experience Matters for Clients

One of the primary reasons a business owner turns to a financial intermediary is their lack of knowledge about financing options. Experienced financial intermediaries help business owners understand what types of financing they might qualify for, what the costs associated with various financing options are, and what type of financing is best suited for their needs.

2. Industry Knowledge Matters to Clients

When a client is interested in working with a financial intermediary, they are going to ask about specific industry experience. Having experience in construction financing is helpful if you focus your marketing efforts on dealing with contractors and sub-contractors. If you have a lack of experience, you may not be able to advise your clients of the best options for their business model.

3. Communication Matters to Clients

Business owners have numerous challenges which they must deal with on a regular basis. When they are working with a financial intermediary, they depend on them for clear and regular communication. No business owner wants to discover weeks into a funding proposal they are missing documents, or they have no chance of securing financing. A financial intermediary must always remain in communication with a client, and make sure they are being honest with them regarding their potential for securing financing.

4. Loan Products Matter When Selecting a Broker

If a client goes to a financial intermediary, they expect they will have a menu of product offerings. If a financial intermediary is dealing only with local banks, the client is facing the same limitations and challenges as if they were going to the bank themselves. Being able to offer a broad range of products is important for growing your business, and to serving clients most effectively.

5. Competitive Rates are Important

Business clients do not want to pay any more than necessary to secure the financing they need to maintain their business. For a financial intermediary, this means not only must they offer a variety of products, but those products must be competitively priced in order to secure new clients.

6. Competitive Fees Will Help You Win Clients

Financial intermediaries who charge a reasonable fee will nearly always do better than a financial intermediary who has fees that are typically above industry standard. Clients understand when they are working with a financial intermediary they are paying for services but since they are cost-conscious, they do not want to overpay for these services.

7. Value of Time for Clients

Business owners are often facing time challenges when they are searching for funds for their business. This means a financial intermediary must be able to review the client’s documents, understand their funding needs, and come up with workable solutions to meet their needs. A skilled financial intermediary knows where to turn to meet their client’s unique needs. This is an important skill that is developed through experience and industry knowledge.

Business owners in underserved industries often face unique issues securing financing and as a financial intermediary, it is important you know there is help available. Whether your client is part of a minority-owned business, a contractor or sub-contractor, or a staffing company, Capstone is available to help. You can feel confident that regardless of whether you refer one client, or one-hundred clients, you will always be paid your origination fee for as long as your customer continues to do business with Capstone. We offer a full range of products, we offer financing to business owners who are in industries with unique financing challenges, and we are committed to helping financial intermediaries grow their businesses. If you want to learn more about how we support our referral network and their network’s clients, contact Capstone Capital Group today at (212) 755-3636 and see how we can help you grow your business

Best state to open your loan brokerage

14:24 07 May in Blog, Broker Resources

If you are considering opening a new loan brokerage, like any other business, location matters. Some areas may offer more opportunities than other, regardless of what type of business you are planning to launch. For a loan brokerage, it makes sense to establish a business where there are numerous businesses starting, and a shortage of access to capital.

Various Metrics Available for Loan Brokerages

While North Dakota, Utah, Florida, Texas and Nevada show the highest average growth in new business startups, some of these states already have the most accessible financing available. For example, North Dakota and Utah along with Iowa and South Dakota have been rated by Wallet Hub as the states with the most accessible financing.

However, if you look at Florida and Nevada in this same report, they rank near the bottom in terms of accessibility to financing. Keep in mind, in order for a business to thrive, they need working capital. Keep in mind, for a small business, capital is a must. Before a small company can grow, they need to increase their market share, hire employees, may need additional inventory, and they will likely need equipment. That means they are the ideal target audience for a new loan brokerage.

Regulatory Requirements May Pose Challenges

Before you decide where to locate your business, you should research the requirements for loan brokers in the state. Some states may require individual licenses as a loan broker. If you live in one state, and you are doing business in another state, you may face other regulations as well. Careful review of a state’s financial regulations will help you determine where you can make the most difference, and where you may be subject to fewer regulations.

Borders Not the Barriers They Once Were

For those commercial loan brokers who are not interested in relocating to Florida or Nevada, all is not lost. Thanks to and ever-changing technology landscape, it is now possible to do business across the country as seamlessly as we once did business face-to-face. Many direct lenders make loan applications available online and thousands of lenders welcome loan requests from brokers regardless of where they are located geographically.

Your Most Important Goal: Meeting Client Needs

Your client’s goals will be the most important aspect of your business. Regardless of size, all businesses need working capital. This capital may be used in various ways including:

  • Increased marketing efforts
  • Paying employees/hiring new employees
  • Meeting regular obligations such as rent of space
  • Purchasing equipment
  • Ensuring proper inventory

As a loan broker, your task will be to match your client’s needs with the right lender, and the right capital type, regardless of where you are doing business. This is where Capstone can help.

Valued Relationship with Brokers

Many lenders offer a one-time referral fee to a loan broker who brings in new business. They are initially excited to do business with you because it means they have a new client. Oftentimes, once a relationship is established with your client, the lending institution turns their back on the broker who referred them. That’s not how Capstone does business — we nurture loan brokers who refer business to our firm. In addition to paying you a commission for the life of our relationship with your client, we also offer guidance in other ways. For example, Capstone offers those who refer business regular access to various training and other resources to help them grow their business. We believe that the more successful you are, the more successful we are. Therefore, in addition to regular accounting of all business transactions and regular commission checks from your clients, you can turn to us for assistance in expanding your loan brokerage.

If you want to learn more about how Capstone supports their referral network, contact Capstone Capital Group today at (212) 755-3636 and see how we can help you grow your business, and provide your clients the financing they need.

 

3 Things Brokers can do to Leverage Lower Rates from Lenders

12:05 01 May in Blog, Broker Resources

Interest rates are one way a broker can stand out from others in their field. With overall interest rates rising however, getting the best possible loan rates from lenders presents some interesting challenges. This is particularly true as lenders often shy away from making small business loans, preferring those loans where a company is well-established, has a proven track record, and has sizable assets. The irony is these are the same firms which may not need a loan.

As a finance broker, you are probably dealing with a company who may be struggling to obtain capital from their local banks. This means you have to evaluate your client’s needs, identify the right lender, and negotiate the best possible rate to meet their needs with that lender. Finding the right leverage when negotiating with a lender isn’t always easy but there are three things you can do which may help.

1. Identify the Business Strengths

When the business you represent has strong contracts with customers, has a sterling collection record, or has a low debt ratio, you have the ideal leverage to negotiate a lower interest rate. These are all plusses which can be used in discussions with a lender. Make sure you highlight these strengths when you submit a loan package because they could help you get a lower rate.

2. Offer a Lender Collateral

For some borrowers, collateral is the best leverage they have. For example, a company that has valuable equipment may be able to live with a lien on the equipment. This works best when a company does not have to worry about upgrading due to technological advances. Many lenders feel more confident lending when there is a backup plan in the event of default. This may also be helpful when seeking a lower interest rate.

3. Consider Lines of Credit vs. Loans

Lines of credit often have lower interest rates. They also offer other benefits including your client’s ability to use funds on an as-needed basis. The company pays interest only on the funds which they use, and the balance of the loan remains on deposit with the bank until it is needed. The added benefit of this type of financing is the customer also makes payments only on what they are using.

Consider an Alternative to Bank Loans

Keep in mind, lenders are in business to make money. To maximize their profit, they may be offering a variety of programs with slightly higher interest rates than you might otherwise expect. What many financial brokers overlook is the ability for their customers to get the money they need without having to take on the additional burden of debt. This can be accomplished through the process of invoice factoring.

Factoring invoices can provide numerous benefits to your customer. Some of those benefits include:

  • No Debt– factoring means a business owner has no need to borrow money. Lack of debt improves the business’s balance sheet. Not taking on debt also means there is no loan servicing to be concerned about meaning the business is not worried about having money to make loan payments every month.
  • Transfer of Risk – instead of worrying about collecting money from a client, when a business factors an invoice, they are transferring the risk of the collections from themselves to the factoring company.
  • No Hidden Fees – unlike a bank loan, you will not incur a late fee for payment nor will you incur a penalty for paying early. If a client pays the factoring company before the invoice is due, it merely improves your customer’s standing and strengthens their position the next time they opt to factor an invoice.

One of the numerous benefits of working with a factoring company is interest does not accrue on an outstanding balance. In fact, your customer will know up front exactly how much they are going to pay in fees. Another significant benefit is time: You never have to wait weeks, and in some cases months, for an answer. In most cases, you will know within a short period of time whether a transaction is approved, and your client will have the money they need within a few business days.

If you have clients you feel could benefit from invoice factoring, you should contact Capstone immediately. We’re committed to working with brokers across the country who have customers who need capital to keep their business operating. We can help you get your customer the money they need without worrying about the burden of added debt. Contact one of our account representatives today at 347-410-9894, reach out to us via email at [email protected] or fill out our simple online contact form and let’s see what we can do to help.

4 Ways to Grow Your Network as a Commercial Loan Broker

10:16 31 August in Blog, Broker Resources

Different from your social network, your business network as a commercial loan broker is all about making and building connections to help you succeed within your industry. It is no secret that building your network is key to building a successful loan brokerage. And, not only is networking imperative in growing your client base, but it also plays a huge part in developing your reputation as someone who can get transactions funded.

There are plenty of reasons you should be networking as a commercial loan broker. So, when you are working to make connections in the commercial lending industry, follow the four tips below.

  1. Partner with the right lender.

One of the most important networking tips for commercial loan brokers is to partner with a group of lenders that will help you maximize your efforts and meet your goals. By working with the best lenders, you not only will be able to offer your clients great choices for funding, but ideal lenders will provide what your clients need so you can focus on growing your business while also making your clients happy.

When looking for a lender to work with, keep an eye out for a lender that offers a referral program, such as Capstone Capital Group’s Referral and Broker Program. Not only does Capstone Capital Group’s referral program pay you commission for each client you bring in for the life of the contract, but they also provide other benefits such as broker support and training, and full accounting.

Satisfying your client’s needs not only leads to your success as a commercial loan broker, but it will also help you continue building your network. Since you need to have the ability to offer your clients options for loans to fit their individual needs as a broker, also partner with lenders that provide back and front office services to their clients, like Capstone.

After all, your goal in networking is to gain more clients. So, you need to partner with the best lenders to be able to offer your clients the best options to keep them happy.

  1. Keep your priorities straight.

Once you’ve found suitable lenders and investors to partner with, like Capstone Capital Group, you’ll get to work pairing them with the right businesses in need. During this time, it’s imperative that you keep in mind the promises you have made to your clients and the lenders in your network, and follow through with those promises.

As a commercial loan broker, your top priority should always be to match clients and lenders with opportunities that will help each party succeed. By keeping your priorities straight, you will ensure that you are building trusting relationships with lenders and clients. And, as word of mouth advertising is incredibly powerful and happy clients tell others about their successes, in order to grow your network, you need to follow through with every client and each promise you make.

  1. Take advantage of social media.

In order to make new business connections and grow your network as a commercial loan broker, you can go through traditional means, such as cold calling or sending out emails. However, it is also equally as important to utilize social media sites as well.

Take advantage of today’s social media by setting up different accounts on different sites including Facebook, Twitter, LinkedIn, and Google+. These popular sites make it easy to share information while interacting with a range of associates and borrowers. To expand your network, set up both a personal page and a company page. Then, join forums, participate in discussions, and share interesting industry news on your pages to continue growing your network.

  1. Participate in industry events.

Attending industry events or networking events is another way to make connections within your industry as a commercial loan broker. All it takes is a quick search online to check on upcoming events for the commercial lending industry and in your area. Industry events could include lunches, trade shows, and seminars, all of which present an excellent opportunity to network and expand your business circle.

As with most things in life, practice and preparation are necessary for successful networking in any industry. If you find you are not constantly networking, you could be missing out on big opportunities for your business. So, start your networking process by setting goals, creating social media accounts, finding industry events to attend, and signing up for Capstone’s Referral and Broker Program.

Brokers & Lenders

Understanding the difference between brokers and lenders

10:30 07 November in Broker Resources, Business Funding

Oftentimes, when a business owner is seeking financing, they do not understand the difference between dealing with brokers and lenders. There are advantages, and disadvantages to working with each; however, one must understand how each functions to understand what type of deal they will be getting in the end.

Dealing with financial brokers

When you are dealing with a broker for a financing deal, there are some benefits. The broker can review your proposal, and then try to match your needs up with the right lender. This often means the broker will contact numerous lenders on your behalf; while this may seem like a good approach, it could be problematic if the broker is not familiar with the various loan programs offered. Sometimes working with a broker means significant delays in getting the financing you need.

Dealing with lenders

When you deal with a direct lender, you are dealing with the decision-maker. This is good news on one hand but may cause you additional problems. If you deal directly with a lender, you are limited to the programs offered by that lender. In other words, if you go to a company who only factors invoices, you may not be able to obtain a line of credit, or other financing vehicles. This can be problematic if you need various sources of capital.

Understanding financial broker fees

When you are searching for financing through a broker, it is important to understand how they are paid for their services. In some instances, the broker will receive a one-time finder’s fee; in other cases, an ongoing commission. There may also be instances where you pay a higher interest rate because you went through a financial broker instead of going directly to the lender. Make sure before you agree to have a broker work on your behalf, you understand how they are paid, and what their fee will cost you immediately, and over time.

Benefits of working with brokers

Even if you are paying a finder’s fee, or a commission, there are some valid reasons to consider working with a broker who handles business financing. By working with a broker, you will have access to numerous loan programs; a well-trained broker will review your needs, discuss your options with you and then match your unique needs to the right lender. They can also facilitate the paperwork, help with the application process, and answer questions as they arise.

Relationships matter with financing

For those business owners who have an existing relationship with a financial broker, you should maintain that relationship. While many lenders discourage such relationships, at Capstone Capital Group, we encourage them. We know that when your broker comes to us for financing options for your business, they are looking out for your interests. We take pride in offering those brokers who are interested in doing business with Capstone a wide range of training materials so they understand our products better. We believe in building relationships; and nurturing existing relationships.

Finding the right brokers and lenders

The most important thing you can do for yourself, and to ensure your business continues to grow is find the right brokers and lenders to work with. Well-established businesses, with excellent cash-flow and a record of success often can go to their commercial bank and get whatever products they need. However, small, and medium-sized businesses face unique challenges: they need different types of financing, they may not have reliable cash flow.

Business owners need solutions that work for them; this means working with a financial partner who is willing to take the time to review their business model, review their current finances, and understand their future goals. If you are currently working with a broker, or a lender who does not seem to ask the right questions, or continues to try to fit you into a “one-size-fits-all” loan, you may be working with the wrong person.

If you are small or mid-sized business owner seeking a relationship to help your business secure the financing you need, contact Capstone Capital Group today. We are a private financing company who works tirelessly to find funding solutions for our clients. Brokers, who are interested in working with a lender who puts the interest of their clients first should also contact us. We offer innovative solutions to a wide range of financing challenges for small and midsized businesses; call us today and see how we can help.

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