Why use a business finance broker?

The short answer

Why use a business finance broker rather than going straight to your bank? A broker can save your company time by matching its needs to lenders likely to consider them, helping prepare the application and setting offers out side by side. Going direct can suit you better if you have a strong banking relationship, want a State-backed SBCI loan or need a product a broker’s panel does not cover.

Neither route suits every company. We are a commercial finance broker in Ireland ourselves, so this page sets out the limits as plainly as the benefits. Welcome Finance works only with limited companies registered in Ireland (LTD, DAC, PLC and ULC) borrowing for business purposes.

What does a business finance broker do?

A broker sits between your company and lenders. It does not lend money and does not make the credit decision. A good broker will:

• Ask what your company needs the money for, how much, for how long and how it will repay
• Tell you which of the lenders it works with might consider the application, and which will not
• Help you gather the right documents and present the application clearly
• Pass the application to a lender and help you understand the offer that comes back
• Tell you honestly when its lenders are not a good fit, and where else you could apply

What are the benefits of a finance broker?

The main benefits of a finance broker are time, knowledge of lenders’ criteria and help presenting your application. None of them changes the lender’s decision or its pricing.

• One conversation, instead of repeating your company’s story to several lenders
• Knowing which specialist non-bank lenders operate in Ireland and what each looks for
• Help gathering the documents lenders ask for and presenting your numbers clearly
• Offers set out in plain terms: rate, fees, total amount repayable, security and any personal guarantee
• Fewer applications to lenders unlikely to say yes, which can mean fewer enquiries on your Central Credit Register record
• Help with products banks offer less often, such as short-term unsecured loans, a merchant cash advance or revenue-based finance

Broker vs bank: when does going direct make more sense?

Going direct to your bank or a lender is often the better route when:

• Your company has a long relationship with its bank, a clean account history and good management accounts
• You want a loan under a State-backed scheme: SBCI loans such as the Growth and Sustainability Loan Scheme are applied for directly with a participating lender after you get an SBCI eligibility code (see SBCI loans)
• You need a larger, longer-term secured loan, where the main banks are often the cheapest source
• You already know the lender you want, or need a product a broker’s panel does not offer

Broker vs bank: a quick comparison

The main Irish banks publish their standard business lending rates, so you can see a starting point before you apply. Our guide to business loan interest rates in Ireland collects the latest published figures. If your bank refuses, our guide on what to do if the bank refuses a business loan explains the steps.

• Choice of lenders: direct, one lender per application; broker, the lenders on its panel
• Cost: direct, the lender’s pricing; broker, the lender’s pricing, with commission paid by the lender and in some cases an agreed fee
• State-backed SBCI loans: always apply direct to a participating lender
• Help with the application: direct, from your relationship manager if you have one; broker, from the broker
• Credit decision: always made by the lender, whichever route you use

What a broker cannot do

A broker cannot make a lender approve an application, change a lender’s eligibility rules or guarantee a rate or timescale. It cannot promise a better rate than going direct, because the lender sets its own price either way. Some lenders say they can decide within 24 hours of a complete application, but that is never guaranteed, through a broker or direct.

Many brokers, including us, work with a set panel rather than the whole market. Our panel is five specialist non-bank lenders, so we cannot tell you whether a lender outside it would offer a better deal. A broker should not sign anything for you or hold your company’s money, and it cannot give independent tax or legal advice: talk to your accountant or solicitor about security, personal guarantees and tax.

How are business finance brokers paid in Ireland?

Most business finance brokers in Ireland are paid commission by the lender when the finance completes, and some also charge the company a fee. Commission is a cost for the lender, so it is reasonable to ask how much it is.

We are paid commission by the lender when finance completes. We do not charge your company a fee and never ask for payment upfront. Commission can differ between lenders and products, and you can always ask what we will receive. Our how we are paid page has the detail.

What should you ask a broker before you start?

Ask these questions before any work starts, and get the answers in writing:

• Which lenders do you work with, and which products can you actually arrange?
• Are you paid commission by the lender, and roughly how much?
• Will you charge my company a fee? If so, how much, when is it payable, and is anything due if no finance goes ahead?
• Does the lender’s offer include any fee that is passed to you?
• What is your regulatory status?

Are business finance brokers regulated in Ireland?

It depends on who the broker arranges credit for. Under the Consumer Credit Act 1995, credit intermediaries arranging credit for consumers, meaning individuals acting outside their business, must be authorised by the Competition and Consumer Protection Commission (CCPC). A broker that arranges business-purpose finance only for limited companies is not arranging consumer credit, so, as we understand the law, that regime does not apply to it.

Welcome Finance is a commercial finance broker, not a lender, and is not regulated by the Central Bank of Ireland. The Central Bank’s Consumer Protection Code does not apply to our service, although a regulated lender may still owe your company protections. Our regulatory status page explains what that means.

How do you check a broker or lender?

A few minutes of checking can save a lot of trouble:

• Search the company free on the Companies Registration Office (CRO) register at core.cro.ie, and check its name, number, status and registered office
• If it trades under another name, check that the business name is registered with the CRO
• Check that the address, phone number and email on its website match the CRO record, and that the website has a privacy notice
• Ask for its regulatory status, lender panel and fee terms in writing
• Contact any named lender through the lender’s own website, not through links the broker sends
• If a lender or broker says it is authorised, search it on the Central Bank register at registers.centralbank.ie and check the Central Bank’s warning notices

Red flags: when to walk away

An Garda Síochána has warned about advance fee fraud involving websites offering unsecured loans: quick approval with no checks, then a request for money before the loan is paid out. Walk away if a broker or lender:

• Asks for any payment upfront, such as a fee, tax or a deposit, before a loan is paid out
• Guarantees approval, or promises a loan with no checks at all
• Does not ask for financial information, identity documents or details of the directors
• Asks you to pay into a personal account or an account in a name that does not match the company
• Asks for your online banking login details or passwords
• Pressures you to sign the same day, or will not give you terms in writing
• Cannot be found on the CRO register, or uses details that look copied from a genuine company

Illustrative example

Illustrative example: a trading company needs €40,000 of working capital within a few weeks. Its bank offers a secured loan but needs several weeks for a valuation. The directors could wait for the bank, apply to non-bank lenders themselves, or ask a broker which non-bank lenders might consider an unsecured application. A non-bank lender may cost more than the bank, so they should compare the total amount repayable on every offer, not only the speed.

Whichever route you take, have your documents ready. Our business loan documents checklist lists what Irish lenders usually ask for.

How Welcome Finance can help

Our panel of five specialist non-bank lenders may be able to help with unsecured and short-term business loans, working capital, tax-bill funding through a general business loan, merchant cash advances, revenue-based finance, stock finance and trade finance. If our panel cannot help, we will say so and suggest where to apply instead. See our lenders. Welcome Finance is a commercial finance broker, not a lender, and is not regulated by the Central Bank of Ireland.