While most finance brokers are reputable and trustworthy, every industry has its bad eggs. Unfortunately, it is possible to stumble across finance brokers who are lacking in integrity, putting their own interests before what is right for your business, or making recommendations with little regard for how they could impact your business in the long-term.
Whether you are already working with a finance broker and have doubts, or you are considering working with a finance broker in the future, here are 9 red flags that could be cause for concern.
1. They talk down to you
Unless you work in the finance industry a lot of the terminology, acronyms and general jargon can seem complicated. Even people who have been working in the finance industry are continuing to learn throughout their careers. A good finance broker will be able to translate the detail into simple information that is easy to understand, and you should finish your meetings feeling smarter, not confused.
2. They are poor communicators
While a good finance broker is likely to be busy dealing with their many clients, they should still be able to make time for you when they are working on an agreement for you. Brokers who are MIA for days or even weeks at a time and then only offer basic responses are not as invested in your business as they should be.
3. They try to shut others out of the relationship
You might want to include others in your financial discussions whether you have an accountant whose opinion you value or shareholders. If a finance broker attempts to prevent others from getting involved or looking too closely at an agreement, it could suggest they are trying to hide something.
4. They aren’t interested in your business
There is no one-size-fits-all approach to finance and without understanding your business in detail, a finance broker cannot provide the service that you need. The best finance brokers are those who are genuinely interested in your business’ history, present, and future and they will try to uncover as much as they can through research and consultation with you. If your finance broker treats their work like a box ticking exercise, it might be time to find someone with a more personal touch.
5. They say ‘yes’ too much
Every finance agreement is unique which is why the process requires a personal and tailored approach. This also means that sometimes it is not possible to secure exactly what a business wants. Reputable finance brokers will be open and honest from the beginning about what it is realistic, will manage your expectations, and, if what you think you want isn’t appropriate or achievable, they will guide you towards a more suitable solution.
6. They pressurise you into an agreement
Making the right financial decisions for your business is vital to its stability and growth. The job of a finance broker is to get to know your business today and your ambitions for the future, to help you make sense of your options, and, where appropriate, to prevent you from putting your business in financial jeopardy. Your finance broker should inform and explain, but the final decision as to whether to proceed or not is yours alone. If you feel you are being pressured, rushed, or they are ignoring your concerns, take some time to step back and consider your options.
7. They are not FCA accredited
Finance brokers have to be accredited by the Financial Conduct Authority (FCA) if they are providing services to regulated businesses, but not if they are only working with unregulated businesses. However, even if you are not a regulated business, choosing a finance broker who is FCA accredited gives you peace of mind that they are being held to the highest standards by an external body.
8. They are affiliated with a particular lender
Some finance brokers can only offer funding from a particular lender or a restricted group of lenders. This can mean that you are not offered the best possible rates or terms that are available on the market, or that they prioritise a certain lender’s profits rather than what is best for your business. On the other hand, independent finance brokers and those who can access a large panel of funders can offer finance solutions that are in your best interests.
9. They are reluctant to discuss what will happen at the end of the agreement
Once your finance agreement is up and running you will make fixed regular payments over a set term, but what happens when that agreement comes to an end? The answer to that question will vary depending on the type of finance product you have, but you might have the option to return the assets to the lender or finance company, to extend the agreement, or to buy the assets for a fee. It is important that you understand the terms that you are agreeing to, so if your finance broker is reluctant to discuss the end of the agreement in detail, it could be a red flag.
At Bluestone Leasing we’re passionate about helping businesses to grow and succeed. We strive to provide a service level which other finance brokers will struggle to equal, built primarily on long-term relationships, customer success, financial expertise, and innovation.
Our philosophy is to look after ourselves as a team, take care in selecting the best people to join our team, then channel their enthusiasm and expertise into enabling success for our customers. We are not interested in anything other than mutually beneficial finance arrangements.