What’s the difference between a broker and a lender?

What’s the difference between a broker and a lender?

Broker and lenders come into play when customers are looking for a personal or business loan. They’ll work independently on behalf of a supplier, or within a bank or financial organisation. Although they both ultimately help customers secure funding, the way they go about it differs. This blog goes into more detail to help you figure out if a broker or lender is best for you.

What is a lender?

A lender is a business who work with you to source finance, usually in the form of a loan that they’ll issue. You’ll communicate directly with them and go through several steps such as loan applications, affordability and creditworthiness assessments, as well as credit reference checks to ensure you’re eligible. They’ll discuss and issue all the terms and conditions of the loan including repayments, additional fees, late payment charges and the right to withdraw.

Lenders are a great option for those who like to take control or enjoy the researching side of things. You’ll need to look into the different lenders available to you and the services they offer. You should also check that your lender is authorised by checking the Financial Service Register

What is a broker?

If you feel a bit overwhelmed by the amount of financial solutions out there, or perhaps don’t have the time to give it the consideration it deserves, then a broker might be the better option. Brokers work on your behalf to source the right lender for you.

They’re dedicated on getting the best deal for you in the quickest amount of time, and will get to know your business requirements before searching for a lender that’ll meet your priorities and budget. They’ll also go through the terms and agreements of your loan including interest rates, repayments, APR and cancellation policies. Brokers may charge a fee or receive a commission for this service, but they should state this within their own terms and conditions.

Which one is best for you?

This comes down to your time, preferences and circumstances. As we said, if you’re busy or find researching multiple options frustrating then a broker will save you a lot of time and stress. However, if you’re happy speaking directly to lenders then you have ownership over the lender you choose. Either way, it’s important to find a loan that meets your needs and you can comfortably afford to repay; you don’t want to put yourself into any financial difficulties.

Are Busby Finance a broker or lender?

We’re brokers. We’re a small, independent company who work on your behalf to find the right financial solution that’ll allow your business to flourish. We understand how daunting the lengthy conversations and applications can be and we want to take all of that fuss away for you. We’ll make the time to discuss your current business position, where you want to be and how we can help you do that.

Contact Us

If a broker sounds like the best solution to grow your business, then we’d love to hear from you. Take a look at our Who is Busby Finance blog or contact our friendly and experienced team.