Direct Finance lenders VS Finance Brokers
The Difference Between Direct Finance lenders VS Finance Brokers
If you are looking to get a loan you need to evaluate your options carefully to ensure you get the best deal. This part of the process can seem overwhelming for some entrepreneurs. There are two main categories of funding, direct finance lenders, and finance brokers.
Direct Finance Lenders
A direct finance lender provides financing directly to the borrower so that the borrower does not have to go through third parties or financial intermediaries. The borrower will need to make an application and send it to the financial institution directly. For some, the process may seem time-consuming if you are looking to apply at more then one financial institution.
However, if you are working with direct finance lenders, it is easier to clarify issues and get funded. The lender can respond to any issues faster and more effectively than an intermediary. You can also get better rates if you have multiple accounts at the same financial institution.
Finance brokers work as intermediaries between the financial institution and the borrower. People making multiple applications prefer to use finance brokers to simplify the process. However, if you have questions about the loan, getting answers can be more time consuming than dealing with the lender directly.
Additionally, working with brokers while beneficial, could cost you an upfront fee for their time in finding you the right lender. Also, some financial institutions do not work with brokers at all. This is because the rate of default is higher for borrowers using intermediaries than for those working directly with the bank.
Direct Lenders in Different Industries
There are also a number of benefits for getting funded from the financial institution. You are more likely to get better rates if you approach the lender directly. Even a 1% difference is significant when it comes to repaying the loan. Using a broker may incur processing costs and extra fees you can avoid with direct lenders like Meridian PO.
CDC Direct Lenders
CDC lenders act as direct lenders that offer loans for several programs such as the SBA 504 loan. By working directly with the borrower they can help businesses access financing through the various small business programs to facilitate faster processing of the loan. They work with small businesses to help secure loans that they could not get from traditional lending institutions.
Going directly to the financial institution is also beneficial for those seeking small business loans. By approaching the lender you can review the best rates for the kind of small business loan you need. The financial institution can respond within a matter of hours to your request and pre-qualify you.
How Meridian PO Alternative Financing can Help
Financiers like Meridian PO Finance, are direct lending institution that can provide different forms of financing to help your business grow. Meridian PO provides purchase order and accounts receivable funding to help businesses manage their working capital or fund new projects. Being a direct lender for PO and AR financing means that you can get funding within hours from Meridian even if your credit rating is not so good. Invoices from good and reliable customers is all you need to unleash potential cash flow.