Many merchants ask me if I'm a broker or a direct lender in a way which suggests that to them, brokers are to be avoided at all costs.
I understand the sentiment having worked with enough brokers and their wariness isn't unwarranted. But it's also important to understand what a broker is, what exactly is their purpose and why do merchants need them.
Brokers are intermediaries and, when they do their jobs properly, they can be one of the most valuable assets to merchants and business owners. They're also very valuable to lenders as well because they bring us the merchants with whom we do business. Rarely do merchants deal directly with lenders in the initial stages of funding reviews simply because of the sheer volume of funding requests.
The original intermediary in ancient times according to legend was Prometheus (Hermes) the pagan god who first brought fire to mankind and changed humanity forever. Why didn't the pagan Gods do it themselves? Because someone had to explain what it was and train the humans how to use it properly and not get toasted lol! To this day the Greek word for commission (which is mostly how brokers are paid) is "Promethia" (Pro-mee-thee-a) in his honor.
A good and honest broker is worth their weight in gold because they save merchants time & money. Most business owners have too much on their plate already running their own business to know which lenders to approach and how to go about it. Similar to the insurance industry, lending is a broad market and has many specialized products to offer. A broker will do the triage needed to determine which lenders are the most compatible thus saving a enormous amount of effort.
When a Business owner speaks to a Professional Broker, they're speaking with someone that has experience, know the terrain and has practical knowledge about which lenders can offer the best deals and, most importantly, which lender to avoid! Brokers put their professional reputation on the line daily from both sides. They balance the interests of their merchant clients who are literally their "bread & butter" with those of the lender they work with. Mistakes on either side can spell disaster for them professionally.
When I hear about abuses of trust and unprofessional behavior by Brokers I immediately stop doing business with them, the same goes for merchants.
Brokers who have professional integrity are the key to finding optimal funding terms for merchants and business owners. If you already have one like that, tell your friends, the are really valuable and hard to find!