Brokers Have Spoken: What You Look for from a Private Lender

We asked brokers to name the most important factors to them when looking for a private business loan. The top responses were the following:

• Competitive Interest Rates (65% of respondents)
• Flexibility in the lending offer (54% of respondents)
• Proven ability to deliver on loan offers (51% of respondents)
• Quick turnaround (38% of respondents)
• Transparent lending process (32% of respondents)

While competitive interest rates getting the most selections isn’t surprising, the rest of the selections provide additional context on what brokers look for when seeking a loan for their client. Yes, brokers want the best rates for their clients. However, it’s also important for them that the loan offer is flexible to match the unique needs of their clients. After all, good interest rates won’t matter if the loan terms are too rigid and the lender doesn’t proceed with the loan. 

Moreover, brokers also value the credibility of the private lender. Are they able to deliver on the loan solutions consistently and on time? The last thing they want is for an application to be approved only to face delays during settlement, which could compromise the operations of their commercial clients.

Since many SMEs require urgent funding, it’s important that the loan solutions are not only flexible but are settled within the timeline that the borrower needs.

And finally, brokers want to know exactly how the application process works, what are the associated fees and where the funds are coming from. Transparency is important to building trust with the lender. 

How PMA delivers on the five most important factors for brokers

Competitive rates: At PMA we continually review our rates and fees and strive to provide competitive terms to our clients. And by this, we mean that we consider all the costs to the borrower, not just interest rate. Unlike some other lenders, we don’t charge any upfront fees until the Initial Letter of Offer is accepted and even then, it is only $1,100 to cover our assessment costs. All of our fees are made clear and easy to understand when we produce our Letter of Offer which is issued after approval. 

So even if  there’s a scenario when PMA might not be able to offer the lowest interest rates compared to another lender, when all fees are considered, the overall cost to the client can still be lower overall compared to our competitors. If our rates are slightly higher than our competitors we encourage brokers to let us know as we want to be flexible in order to make our service work for you and your client.  

Flexibility: Unlike traditional finance institutions, PMA is able to be flexible with who we can lend to and for what purpose because we focus on a borrower’s exit strategy to determine their capability to pay back the loan. Moreover, we consider multiple types of exit strategies depending on the nature of the business of the borrower.

For instance, the exit strategy can be in the form of refinancing, when a small business is looking to get a bank loan, but they need the funding much faster than what the bank can deliver or if they don’t have their finances up to date. In that scenario, a small business can take out a private loan to cover their urgent costs and proceed to settle that loan once they refinance to a bank loan down the line.

The exit strategy could also involve the sale of an asset or property. This is a common strategy for construction companies and property developers where they take out a loan to fund a project or finance residual stock.

Aside from the sale of physical assets, an exit strategy can also be based on increased business proceeds. So if a borrower takes out a loan for working capital or business equipment to increase their production or expand their operations, repayment of the loan will be from the increased earnings generated by the business expansion.

All these details are worked out on a case-by-case basis so that loan terms are drafted based on the unique circumstance of the borrower.

Proven Ability to Deliver: One of the main advantages of PMA is that we are the ones making the lending decisions and we don’t have to rely on a third party to provide the funds as we have our own pool of investors to fund our loans. PMA’s sister company, Active Property Group (APG) manages our pooled mortgage fund that currently has around 300 investors.

PMA has been financing loans for our business customers for over 10 years and recently celebrated our birthday with brokers, investors and service partners. You can read more about this here.

Quick Turnaround: PMA provides a streamlined application process via the Quick App form which takes less than 10 minutes to complete. We also have a guaranteed response time of four business hours upon submitting the Quick App to notify the broker or borrower if the scenario is feasible or not and provide an Indicative Letter of Offer if it is a suitable scenario.

This helps in making sure that as a broker, you are able to plan ahead quickly if no solution can be made for their particular scenario.

If the application is approved and a solution can be made, PMA is able to settle loans within five business days upon submission of all required documents.

Transparency - PMA works closely with brokers and borrowers so that they are advised clearly throughout every step of the loan process. We provide all the details regarding the terms and conditions and all the fees upfront so that there are no surprises for the broker and the borrower at the end of the loan term. 

Moving forward

The PMA team would like to thank all of our brokers who participated in this survey. Your answers have provided us with valuable insights.  We are committed to listen to your opinions, take all your concerns on board and continuously seek ways to improve our products and services.

If you have any comments or feedback you would like to provide or a scenario you would like to discuss please contact the team using the details below.