Business Finance Brokers: How They Work and Why Use One

Finding the right funding for your business can be time-consuming and complex. That’s where business finance brokers step in. Their job is to act as intermediaries, matching businesses with suitable lenders, saving you the hassle of navigating the market alone. Many businesses choose to use one – in 2023, brokers arranged approximately £38 billion in lending to SMEs, accounting for 69% of total SME lending

Whether you're comparing options, seeking help for small business loans, or simply exploring finance options, we’ll break down how it works.

What is a Business Finance Broker?

A business finance broker connects businesses with lenders, helping secure loans tailored to their unique needs. Brokers leverage their extensive networks, ranging from high-street banks to alternative lenders, to offer personalised solutions.

Here’s what they do:

• Assess your needs: Brokers understand your business goals and financing requirements.
• Compare options: They search the market for the best deals on interest rates, repayment terms, and loan flexibility.
• Manage the process: From completing paperwork to negotiating terms, brokers simplify the entire application process.

By working with a broker, you can save time, avoid costly mistakes, and often secure more favourable terms than going it alone.

Benefits of Using a Business Finance Broker

Brokers are popular for a reason – many businesses find the task of looking for a loan complex and intimidating. It can provide peace of mind to know you have someone in your corner – plus brokers can access deals that business owners may not be able to.

1. Market expertise

Brokers know the ins and outs of the lending market. They stay up-to-date with the latest products, business loan interest rates, and lender criteria, giving you access to options you may not find independently.

2. Time and efficiency

Instead of researching multiple lenders, brokers present you with tailored options quickly. This efficiency is especially useful if you’re on a tight timeline or don’t have the resources to explore every lender.

3. Access to specialised lenders

Many specialist lenders work exclusively with brokers. If your business needs niche funding, such as invoice finance or asset loans, a broker can connect you to these options.

4. Better loan terms

Brokers can negotiate on your behalf to secure lower interest rates or more flexible repayment terms, ensuring the financing aligns with your business needs.

5. Support for complex cases

If you’re a new business, have limited credit history, or operate in a high-risk sector, brokers can help you navigate challenges and improve your chances of approval.  In fact, 32% of SMEs successfully funded through brokers in 2023 had previously been declined funding elsewhere, marking a 10% increase from the previous year.

Types of Business Finance Available Through Brokers

Business finance brokers can help you access a wide variety of funding options, including:

• Unsecured loans: Borrow without collateral, ideal for smaller businesses.
• Secured loans: Lower interest rates with collateral-backed security.
• Invoice finance: Release cash tied up in unpaid invoices.
• Asset finance: Fund equipment purchases or leasing.
• Merchant cash advances: Ideal for businesses with card sales, repaid via a percentage of daily transactions.

These help businesses to find solutions for everything from short-term cash flow challenges to long-term growth investments.

How iwoca Works With Brokers

At iwoca, we’re proud to partner with thousands of brokers across the UK to provide fast, flexible, and tailored financing solutions. Here’s how our partnership programme works:

1. Easy Referrals Through Our Introducer Portal

Our portal allows brokers to refer clients in just minutes. You can track applications, manage client cases, and access real-time updates throughout the funding process​.

2. Tailored finance options

iwoca offers a range of financial products, including loans up to £1 million and revolving credit facilities. Our solutions are ideal for businesses needing growth capital, cash flow support, or flexible funding​.

3. Dedicated support

Our Broker Relationship Team provides expert guidance, ensuring you have everything you need to support your clients. Whether it’s training, resources, or hands-on assistance, we’re here to help​.

How to Borrow With Confidence

Committing to a loan is a major decision for business owners. That’s why, at iwoca, we’ve designed our finance options to maximise transparency and flexibility at every stage of the process so you’re always in control.

Here’s how we reduce risk for our borrowers:

• Flexibility that works for you: With iwoca, you’re never locked into rigid terms. Our loans allow you to overpay or repay early without penalties, reducing your overall interest costs. Plus, you can choose to borrow only what you need from your approved credit and pay interest only on the amount you use.
• Transparent and simple: We make it easy to understand what you’re borrowing and what it will cost—no hidden fees, no confusing jargon. You can also use our platform to track your loan balance and payments at any time.
• Fast, accessible funding: Sometimes, business opportunities or challenges can’t wait. That’s why we’ve streamlined our application process, offering approvals within hours and funding as quickly as the same day.
• Personalised support: We’re here to help you every step of the way. Whether you have questions about repayment or want to explore new financing options, our customer support team is just a call away.

With over 90,000 businesses funded and a 5-star Trustpilot rating, we’re proud to be a trusted partner for SMEs across the UK.

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FAQs About Business Finance Brokers

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

A broker acts as an intermediary between businesses and lenders, while a direct lender provides loans directly. Brokers provide a broader view of the market and access to a variety of funding options.

How much do brokers charge?

Many brokers earn commission from lenders rather than charging clients directly. Always confirm fees upfront to avoid surprises.

Can brokers help high-risk businesses?

Yes, brokers often specialise in finding solutions for high-risk industries or businesses with limited credit history, leveraging their networks to secure funding.

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