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Business Loan Broker: 5 Ways to Make Money

business loan broker

If you want to be in the business of loaning money to small businesses, you may be wondering how you can make money. Here are 5 ways to make money as a full time business loan broker or as a side hustle.

What is a business loan broker?

As a business loan broker, you'll be responsible for connecting small businesses with lenders who can provide them with the financing they need. You'll want to have a good understanding of the different types of loans that are available, as well as the pros and cons associated with each one. In this article, I’ll explain different types of small business loans and how you can make money as a business loan broker.

 

1. Loan Broker Affiliate

Making money as a business loan affiliate is a little easier than being a loan broker. The business loan brokers make a larger percentage than affiliates; however, the affiliate’s job is to simply bring in customers. Affiliates don’t necessarily have to serve the customers. When servicing you’ll need to take phone calls, follow up with emails, handle paperwork, deal with compliance issues, and make sure data and documents are kept secure.  I’m in an affiliate program with David Allen Capital and have built a great team there within 9 months.  I make money as a business loan affiliate by receiving a commission of 3-9%, bonuses, and receiving residuals from my team when they help someone get funded. Learn more about joining my team at High Paid Agents.

 

2. Employee Retention Credit Program – The CARES Act

The employee retention credit (ERC) is a refundable tax credit for eligible employers who retained their employees during the COVID-19 pandemic. To be eligible, employers must have experienced a full or partial suspension of operations due to a government order related to COVID-19, or a significant decline in gross receipts.

You can start a service helping small business owners get this credit. The Employee Retention Credit program was established by the CARES Act, and it is a refundable tax credit – a grant, not a loan – that you can claim for your business. The ERC is available to both small and mid-sized businesses. It is based on qualified wages and healthcare paid to employees.  Small and mid-sized businesses are receiving up to $26,000 per employee and are available for 2020 and the first 3 quarters of 2021. Check to see if your business qualifies with Bottom Line Concepts.

 

3. Credit and Funding Company

If you like to be hands-on and want to help small businesses get funding, you can do this by starting a credit and funding company. Credit and funding companies teach business owners about credit and how to leverage it to build an empire. The business owners would apply at individual banks and credit unions. The funding typically includes cash and credit cards. As a business loan broker, you'll charge 10% to 15% and receive payment when the funding process is complete.  Most of the clients you’ll need to find should have a strong 700+ credit score. They can check all three credit scores for $1 with MyScoreIQ.

4. Short and Long-Term Loans

Knowing which companies to work with is key when helping small business owners receive short and fast long term loans up to 24 months. As a broker, you'll handle all your client's delicate paperwork to receive funding from lenders and Fintech companies. The best lenders offer competitive rates, flexible repayment terms, and personal services to help you choose the right loan for your business. I've compiled a list of the top small business term loans to help you get started.

  1. Rok Financial
  2. National Business Capital
  3. Bank Breezy
  4. 7 Figures Funding
  5. Uplyft Capital

 

5. Cash Advance

Merchant cash advances are for companies that need funding fast for expansion, marketing, opportunity, or emergency. Most lenders offer a set amount of money, and they will deduct it from the business checking account on a daily, weekly, or monthly basis. To quickly get approved for a cash advance, the small business owner would need to provide a copy of their bank statement showing what their monthly revenue is. Most lenders will lend up to 2.5 times their monthly revenue with a minimum requirement of $5,000 in sales per month.

There are a lot of merchant cash advance companies out there, so you should be able to find one that offers you a good deal. I work with Rok, and Bank Breezy for cash advances.

 

How do business loan brokers find these small business owners who need funding?

 

Get Referrals from Friends and Family.

If you have friends or family who own businesses, they may be willing to give you referrals to their clients who need a loan.

 

Digital Advertising. 

We are living in the era of being a creator of all things. Start creating compelling content that is interesting and informative. Social media is a great way to connect and build an audience. Email marketing can be a great way to stay in touch with them and keep them up to date.

Use Old School Sales Strategies

Cold calling and door knocking might be old school but they still work! Cold calling can be an extremely effective way to reach new potential customers. Making connections through the phone can lead to a visit and funding. When visiting businesses, be sure to take a custom business card and/or flyers.

 So what are your thoughts being making money as a business loan broker? Do you have any questions or comments on how to get started? Let us know in the comments!

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