BLOG: If it Ain’t Broke(r)…
I used to be a broker. When I worked in corporate finance, I helped SMEs raise funds by pitching the business to my network of private equity houses, EIS funds and crowdfunding platforms.
If it taught me one thing, it’s that a lot of business owners are concerned about facing the furnace directly and would rather a broker take the heat by answering all the questions and sorting everything out. The client didn’t want to get their hands dirty and just wanted something to sign at the end of the process, and that’s fair enough. They were paying me a generous commission after all.
Fast forward a few years and rather than taking the heat, I am the furnace. Stretton Capital has a huge broker network and, quite simply, we couldn’t function without them. You’ll often see brokers painted as the bad guys; nothing more than a meddling middle man chasing a fee but without them growth simply isn’t possible. Lenders who try to cut out intermediaries will never scale; they’re the lifeblood of the industry,
Brokers hold a monopoly over new business in this sector. At Stretton, a direct deal is a real rarity and when they do arrive, and I’ll concede a few have hit my desk, they’re rarely packaged in such a way that is conducive to an attractive pitch. Though it’d be remiss of me to say that all borrowers are lost at sea, the large majority don’t know how to approach lenders. Brokers do; they know how each lender ticks and I’d much rather get a well-structured enquiry from my network than a ‘see what sticks’ email from a direct client who doesn’t really know what’s relevant and what isn’t.
Some people chase these ‘holy grail’ direct clients for fear of paying a broker fee but the truth is that the hunt will be long and perhaps even more expensive once you factor in marketing costs. I’d much rather spend my time cultivating relationships with top brokers, who know how to take care of me and their clients, and who will likely send me dozens of brilliant new borrowers every year.
Stretton Capital has seen a near 200% rise in new enquiries since we came back after Christmas and that’s because we take care of our brokers, and they take care of us.