At some point, most individuals need to borrow money. This is where the assistance of a financial broker is required. You can organize for borrowers to receive loans. A financial brokerage business acts as the intermediary between the borrower and the lender. It is important that as a financial broker, you know how to package and properly format loan applications to lenders if you want to successfully borrow money on behalf of your clients. Some of the advantages of starting a financial-brokerage business is that you will earn the power, prestige and earning potential that come with the business.
Get securities licenses. Financial brokerage firms are classified as securities investments, therefore, it is illegal to start operations before getting a security license. You will be required to take a state-approved licensing exam before you can become licensed. For states that do not require a licensing exam, you will be required to undertake proper licensing procedures before you can start operations. For instance, in Indiana, this includes undergoing a background check and submitting an application to the National Mortgage Licensing System to get a surety bond.
Find a location. You can choose to get a physical location, online location or even start a home-based business. This depends on your financing, business needs, your target market and future business plans.
Get the required documentation. Devise different forms that will define the relationship and terms of agreement among the various parties involved in the processing of loan applications from the beginning to the end. It is not advisable to get into any agreements with creditors or lenders without putting the details down in a written contract. Some of the required forms include a fee agreement form and an application form that potential borrowers will use to file for a loan application. Details in the application form include the contact details of the applicant, aim of getting the loan, repayment terms and the amount of loan requested. You should also draw up other documents such as a cover letter, which you will use to present to lenders when making applications on behalf of your clients. Also prepare a letterhead and business cards for your business.
Find lenders. It is important that you know who the lenders are and where you can find them within your region of operation and overseas. Some lenders include insurance companies, credit institutions, banks, pension funds, private lenders and lending companies. It is important that you negotiate with the lenders directly and submit applications directly to them.
Find borrowers. Market your services so that clients know you can find them financing solutions. Some of the most popular financing demands are for mortgages, business loans, debt consolidation, venture projects, commercial projects and equipment loans.
Market your services. Come up with a strategy that will help you get clients. The more clients you get, the better since your primary method of earning income will be through commissions from clients.