Business Finance Consultant - would you use this sort of service?

mikeyboy

Hello,

Do any of you use a business finance consultant for obtaining finance for your business?

The reason i am asking is that I am looking into the possibility of starting a business offering services such as Hire Purchase, Business Loans, Commercial Mortgages and leases etc.

There are some franchises out there which I could join, but they are ££££ to join. I know i will need to obtain a Consumer Credit License, but once i have that i was wondering if anyone had any clues/ideas on how to market my business and get clients on board.


Any ideas /feedback on this idea would be helpful

Thanks
Mikeyboy

motorguy

mikeyboy wrote: »

Hello,

Do any of you use a business finance consultant for obtaining finance for your business?

The reason i am asking is that I am looking into the possibility of starting a business offering services such as Hire Purchase, Business Loans, Commercial Mortgages and leases etc.

There are some franchises out there which I could join, but they are ££££ to join. I know i will need to obtain a Consumer Credit License, but once i have that i was wondering if anyone had any clues/ideas on how to market my business and get clients on board.


Any ideas /feedback on this idea would be helpful

Thanks
Mikeyboy

Out of curiosity, whats your background in this field?

WHA

You will need to be VERY good at marketing yourself and your services. The business finance market is virtually saturated - LOTS of people doing the same thing. There is the scope but you'd need a very good "unique selling point" or already have lots of potential customers. You need something that would make you the "choice" of your potential client base above all the others.

The trouble is that there are relatively few businesses needing finance from a broker - most new business start-ups and growth are in the very small micro business sector, typically self employed working from home or with a very small number of staff - particularly "knowledge" based such as IT contractors etc - such people need little more than a simple office setup which is affordable via credit card or savings. Due to the state of UK manufacturing, there are less and less "old fashioned" types of business that need proper "plant". Businesses wanting vehicles will usually take a loan from their bank or take the dealer's finance deal. A business's bank continues to be the first port of call for finance and only when the bank refuses will a business look elsewhere, perhaps to brokers. In our experience with our small/micro business clients, the only ones who use brokers have been those wanting something unusually, either peculiar plant or higher-than-normal loan-to-value, such as needing over 100% to finance a hotel purchase or 90% to finance a pet boarding kennel, where the banks have refused as the ratios were too high - such cases are very rare.

If you compare business finance with domestic finance, there may be loads of domestic finance brokers, but their potential target client base is probably 40 million domestic customers in the UK. Compare that with the likely number of businesses that may be interested, probably just a few hundred thousand.

mikeyboy

Hello and thanks for your replies.

I don't have a direct background in commercial finance, I am currently a medical equipment sales manager but am also studying towards my CeMAP exams (domestic mortgage advice) in my spare time.

The reason for me posting the subject of commercial finance is that i come into contact with a good network of people (mainly dealers) who would like to offer finance for their clients (the end users) but dont want the extra headache of sorting out paperwork etc, so they just let the client sort it out. I am fairly confident that the dealers would support me by putting business my way if i offer them a commission/finders fee for each deal. They would also get the benefit of offering a one stop shop for the client.

I am concerned that my employers wont like the idea of me doing other work outside the scope of their business. I also think their could well be a nieche in offering financial solutions to the healthcare market, dental / opthalmic etc etc, a bespoke service to the market.

Any ideas? what do you think i should do next?

Thanks again everyone