their revenues can do so by following 3 easy steps.Starting a commercial equipment financing business can be a doubly successful endeavour for mortgage brokers because it can generate a new income stream as well as open up more doors for building their existing mortgage business. Also, financing equipment can be a good stepping stone for a mortgage broker into the more complicated world of project & commercial property finance. With good commissions available, this area should be of interest to the expanding mortgage broker's business.
While the thought of commencing a new business venture can be a daunting one success will come from having sound procedures and practices. A small amount of work initially will quickly help you to determine if there is a business opportunity, and if there is - how to go about taking advantage of it.
1. Establish your footings.
Initially using a broad brush you need to determine if there is an immediate opportunity for you in financing equipment. Call some people in your client or personal network and ask them if their employer or business uses finance for their equipment. Get some names and contact the people responsible for the financing and ask them what they finance, and when they finance. Also what product they use and why. You might also ask who they use and how they decide who to use.
By doing this you are educating yourself on some of the terms and jargon that is used plus your are testing your comfort level in discussing this sort of financing with exactly the people you will be talking to when you kick your business off.
2. Place your foundations.
If you get some positive feedback you are well on the way to making your decision to venture into this new area of financing. Now you need to line up your finance sources. Most banks and financiers will have a minimum value business introduction hurdle for accreditation. You may need a number of sources so call around and find out the criteria. Also ask about relationship issues. You may want to manage the client relationship yourself or alternatively simply refer clients to the financier who will manage the relationship. Find out about fees & commissions at the front, during and at the end of a transaction. Investigate marketing and other support the financier can provide you in your local area. Also what products are on offer and how do they differ. Importantly, ask them who their target clients are and their credit criteria, it will be best if you are working in the same or similar direction.
3. Build your business framework.
A good database tool is essential. You may be able to use your existing database to manage your new business transactions and pipeline or adapt it to the new process and information you will need to store. Remember, you are now dealing with companies and businesses in addition to the individuals that operate them. How much income do you want to generate, how much time are you going to allocate & when will you allocate the time. What marketing will you use and when. With the end of the financial year approaching what angle would work now.
If your thoughts are positive and your comfort levels OK you are ready to now grow your service offering and to add a new stream of income to your business.
Article written by Mark Dyer.
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