Q&A for How to Become a Commercial Loan Broker

Referrals, referrals, referrals. Social media plays a huge role as well, LinkedIn and Facebook are excellent sources. Go to your local bank and connect with their loan officer and ask about their declines.

As with any new business, there is a ramp up time and expenses. You need to simultaneously find a few lenders who you can represent to borrowers, and begin marketing yourself to the targeted borrowers that are the best match for those lenders. Effective marketing is the key to success in any industry. You can begin by networking locally, building your online presence with social media and your own website, and even using direct mail and cold-calling to generate leads. Always have 3-5 marketing strategies going, and measure their effectiveness as you go along.

This is a very important question and very fundamental concept for a business owner to understand. Most people believe that the interest rate is the basic measure of the value of a loan. This is untrue. The availability of capital is the key. For example, if I am a business person in need of a loan to seize the opportunity to capture a new large project, I must act quickly. If my bank turns me away, I could always look for another bank or shop for a good rate. But if this goes on for even a short time I may loose the opportunity to a competitor. Going to a loan broker could save the day.

Do your own internet search for types of loans you might want to broker. Then, contact the lenders who appear on the search and call them directly to discuss how you might represent them. Most lenders require you to register with them as an "authorized broker". Also note that many banks do not pay brokers, so be sure to ask how your fee might be covered.