Bankers are Your Best Friend
One of the many questions loan brokers ask is “how can I get more business in the door?” For a loan brokerage business, there are many marketing avenues that work and bring in results fast, but often there is one avenue of business development that is often overlooked. That is the avenue of pursuing and aligning yourself with bankers.
Bankers can be a broker’s best friend, and one of the most profitable referral partners for a commercial loan business. Bankers see many opportunities and deals on a day to day basis from current clients and new clients inquiring about the bank’s services. Remember, banks today only approve about 10% of the business they see, so 90% of deals that they see are being turned away. One of the biggest leverage tools a current business client has with their bank is their depository business checking accounts. So when a client goes in to see their banker for a capital need and the banker either can’t approve them for a loan, or the banker says, “we don’t do that type of financing,” the banker faces the risk of losing the depository relationship. This equates to the client pulling their money out of the bank and going to another bank, which is ultimately not the smartest move either, but this is what the business owner’s rational.
Business checking accounts are one of the most profitable accounts a bank has. This is simply because they don’t pay interest on those accounts to the account holder. It is a very big deal when they lose these accounts. That is why a banker will be inclined to refer a client over to your brokerage firm for financing if the bank can’t do it, because they are essentially preserving the depository relationship. The banker is happy, you’re happy, and most importantly the client is happy.
So the next question that comes up is how to approach a banker. Well you could just walk into any bank and ask to see one, but the better way to do this is to first make a call and introduce yourself. This is called “warming” up the banker. Every bank location usually has a commercial loan officer at that location. This is the person you want to speak to. On that first call you want to briefly tell he or she what your company can do, but the main objective is to invite the banker out to lunch to really sit down and explain the value your company can offer. Every banker loves a free lunch! This technique is also great at getting the banker to really listen to what you’re pitching.
Bankers are more in tune to what you are saying when you take a them out of their environment. While you have their attention, you must clearly demonstrate how your innovative finance company, offering a multitude of financing options, can help their clients. Make it clear to them that your lender is not after the depository relationship, but rather simply out to provide financing for the client. The best part is, since bankers cannot legally accept money for referring business to your company, you do not have to split any of your commissions with them. This makes for a very profitable relationship. After the initial meeting, using tactics such as an email marketing drip campaign can be a great way to stay in front of the banker, and offer a constant reminder that you’re their person to refer business to so they don’t have to say no to their clients.
Building these valuable relationships will only make your commercial loan brokerage business better and more profitable.