Huntington Beach, CA Occasionally I feel the need to share some insight in to the capital markets and what it is like working with both clients and other consultants. Obtaining an asset based loan for your business is at times a frustrating process. There are certain consultants in the industry that have their clients sign a fee agreement with them promising a certain percent of the funded amount at closing. This amount can be anywhere from one to five percent of the loan amount.
The problem is, some of these consultants in the asset based lending space, do not have the lender contacts to fulfill the financing their client is requesting. As a result, they come to someone like us to assist in securing the funding.
All of our asset based loan partners, direct lenders, pay us upon the successful close of a loan. We never have the client sign a fee agreement for an asset based loan.
Once the other consultant has their client sign a fee agreement, it can be a burden on the client if they can not deliver the financing as promised. The client looks at them and wonders why they are paying them a fee when their consultant has to go to another broker to meet their asset based loan requirements. A good question.
In these cases, the consultant group that had their client sign a fee agreement, needs to adjust their fee and accept a smaller referral fee in exchange for getting the loan done and doing right by the client. In most cases however, the consultant will guard their client from others and attempt to find what they are looking for through common Google searches and LinkedIn contacts. This wastes time and often causes the client to get exhausted and find an option on their own.
The moral of the story is to choose your broker representative wisely. As a policy, you, as a business owner, should never sign a fee agreement until you know the broker can deliver. We take this out of the equation by having the lender pay us directly upon successful closing of the loan. We never take on an assignment that we do not already have a lender for ahead of time. It frustrates the client and damages our reputation.
Could your business use an asset based loan? If so, we would like to speak with you! You can reach me directly at 714-719-8966.
To your success!
Huntington Coast Capital, Inc.