THE HONEST BROKER FILES / NO. 01
ALL POSTSWhat does an asset finance broker actually do that a bank can’t?
A straight answer to a question most people don’t get around to asking until it’s too late.
If you’ve ever applied to your bank for equipment finance and found yourself weeks into a process that went nowhere, you’ll know the feeling. You needed a van. You got a questionnaire.
What a bank does
Your bank offers its own products. That’s it. One credit policy, one set of appetite criteria, one decision-making framework.
If your business fits neatly inside those parameters, great. You’ll probably get a decent result.
If it doesn’t (because you’ve been trading less than three years, your sector raises a flag on their system, or you had a difficult patch a few years back), you’ll get a decline. Or worse, weeks of silence and then a decline.
The bank isn’t being awkward. It’s just built to serve a particular customer profile, and if that isn’t you, the answer is no.
What a broker does differently
An independent broker sits across a panel of lenders rather than inside one. At Coastal, that panel runs to more than 80 funders. That’s 80 different credit policies, appetites and approaches.
Some lenders are comfortable with newer businesses. Some specialise in specific sectors. Some are set up for high-value plant and machinery. Some will look at refinancing existing assets where a bank won’t go near it. Some will consider deals that a high-street lender would decline outright, and price them fairly.
A broker’s job is to understand your situation first, then work out which part of that panel is most likely to look at it favourably. Not to push you towards the highest commission. Not to find you a product and dress it up. To match what you’re actually trying to do with the lender most likely to say yes on reasonable terms.
That’s a different thing to what a bank does. It’s not better or worse by nature. It’s just structurally different, and for a lot of businesses it’s the difference between the deal happening and not happening.
What about the relationship?
This is where experience genuinely matters, and it’s worth being direct about it.
Lenders talk to brokers they trust. After 25 years in this market, I have working relationships across the panel, not just access to a rate card.
A conversation with an underwriter rather than a web portal.
It means someone picking up the phone and working out whether a deal can be structured differently, rather than getting an automated decline. That kind of relationship can’t be replicated by a first-time applicant walking into their bank branch.
The questions worth asking before you call anyone
Does the broker work with multiple lenders, or are they tied to one?
Tied brokers have limited options. They may still be useful, but you need to know.
How long have they been in this market?
Relationships and lender knowledge take time to build. There’s no shortcut.
Do they explain what they’re doing and why?
A good broker should be able to tell you which lender they’re approaching and why. If they can’t, ask.
What’s the fee structure?
Brokers are typically paid a commission by the lender. Some also charge a broker fee. Both are legitimate, but you should know what you’re paying and to whom.
THE HONEST BIT
A few things brokers can’t do
It’s only fair to be clear.
A broker can’t guarantee approval. Nobody honest will tell you otherwise. They can put your case in front of the right lenders, structure it well and push hard, but credit decisions rest with the lender.
A broker also can’t offer financial advice. What Coastal can do is talk through your situation, explain the options and introduce you to the right funder. That’s a meaningful distinction.
The short version
Your bank can offer you one set of options. A well-connected independent broker can offer you many. That’s useful when your business doesn’t fit a standard template, when speed matters, or when you want someone in your corner who knows the market and has relationships inside it.
If you’re trying to fund an asset and you’re not sure whether to go direct or use a broker, the easiest thing to do is have a conversation. You’ll know pretty quickly whether it’s going to be useful.
LET’S HAVE A CONVERSATION
Tell me what you’re trying to do.
We’ll work out what makes sense from there. Darren Venton, Coastal Asset Finance.
KEEP READING
More from The Honest Broker Files
NO. 01
What does an asset finance broker actually do that a bank can’t?
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NO. 02
What actually happens to your application after you send it
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NO. 03
Hire purchase or lease? What the difference means for your business
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Coastal Asset Finance Ltd is an Appointed Representative of AFS Compliance Limited, which is authorised and regulated by the Financial Conduct Authority, FRN 625035. Asset finance is available for business purposes only. All finance is subject to status and credit underwriting. Your assets may be at risk if you don't maintain payments. Figures quoted apply to UK incorporated businesses only.