Commercial Loan Brokering: A Great Way to Secure Financial Independence

According to a recent report by the Federal Reserve Bank of St. Louis, commercial and industrial loan volumes have declined to historic lows. Economic forecasters predict commercial and industrial lending activity will continue to decline year over year for up to 3 years after this recession is officially declared over.

During times of economic adversity, there are always opportunities to make money. It’s a simple matter of thinking outside of the box.

The St. Louis Fed tells us that commercial and industrial loans are at historic lows. The Fed also says that demand for them remains strong. The problem is on the supply side.

Banks and other conventional lenders are in a retrench mode from their aggressive, pre-recession lending practices because of a need to shore up their own balance sheets. They are doing this by withdrawing the availability of funds to potentially high-risk businesses that could cause them unwanted grief from their banking regulators. Instead, banks are cherry-picking their loan portfolios; only making loans available to their AAA customers.

Banks have rolled up the welcome mat to potentially high-risk commercial borrowers leaving thousands of businesses in desperate circumstances. Absent the funds for continuing operations, many businesses will have no choice but to go out of business; thereby worsening an already unprecedented level of unemployment. Some of them could get help with emergency financing from lenders like ElcLoans and some others.

The demand gap for commercial and industrial loans to businesses with less than impeccable credit ratings presents tremendous opportunities for brokers. Fact: experts predict there will be a $350 billion shortfall in the supply of funds for commercial and industrial lending between 4th quarter, 2009 and sometime in 2011.

This alleged shortfall in the supply of funds for commercial and industrial lending is really a misnomer. The funds are still available. They are just available at a different venue and at higher interest rates, beyond the prying eyes of government regulators.

Money is fungible. It will always move to the opportunity that presents the greatest rate of return. When banks cannot make money in their highly regulated commercial lending business, they simply move those funds to their non-regulated commercial lending subsidiaries. It is in these non-regulated subsidiaries that the funds generate a higher rate of return on higher risk loans without the scrutiny of the government.

Not all, but more than a few of the larger banks have non-regulated commercial lending subsidiaries. These subsidiaries operate as free-standing entities. They are totally disassociated from their parents, in name and practically everything else.

They are typically low-overhead, low-profile operations; so anonymous that only the most senior officers of the bank know they exist. They do not want to call attention to themselves by the general public or by government regulators. However, they do a thriving business.

Because non-regulated commercial lenders are low-profile, they typically do not engage in heavy advertising. Because they are low-overhead, they do not maintain extensive field sales forces to drum up business. Rather, they rely almost exclusively on their networks of commercial loan brokers to generate loan volume.

The commercial loan broker is the essential link between businesses that need commercial loans and commercial lenders eager to make loans. The loan broker is a commissioned agent who is compensated by the commercial lender based on the type, quality and amount of the loan.

Contrary to misinformation circulating around the internet, most states DO NOT require a license to broker commercial real estate or business loans. Some form of license is usually required for regulated financial service professions such as residential real estate broker. If you are unsure about your particular state, use the internet to check out your state requirements.

While a license does not constitute a requirement to be a commercial loan broker, other definite requirements include product knowledge, your own network of commercial lenders and clientele in need of commercial or industrial loans.

Product knowledge: If you do not know what you are selling, you will find it exceedingly difficult to sell anything. Short of being a genius, it could take years to become an expert in all the exotic loan and leasing instruments used in the commercial and industrial lending industry. Becoming an expert, however, should be a normative ideal to strive toward while focusing on making a quick sale in the next 60 to 90 days.

You generate income in the next 60 to 90 days by sticking with the tried and proven basic loans. These include accounts receivable loans (factoring), asset-based loans (equipment), sale/lease-back deals, purchase order loans, inventory loans, credit card receipt loans and letters of credit.

There are basically two practical ways of gaining product knowledge: (1) commercial lenders eager to add you to their network of brokers (2) commercial loan brokers eager to add you to their sales force in consideration of a share of your commission.

The no-cost/low-cost route to product knowledge is to approach commercial lenders with your business proposition. Keep in mind that you are an unknown entity. Many commercial lenders will be reluctant to deal with you because they do not know you. Some will, however. It could be a lengthy, hit-miss process in finding lenders willing to play.

The benefit of this approach is you build up your own network of lenders while gaining valuable insight into the kind of deals your lenders will do and the kind of deals they will not do. Although commercial lenders delight in their anonymity, you can readily find them on the internet under “commercial lenders.”

Signing on with an established commercial loan broker is probably the path of least resistance. Many have established training programs for newbies, complete with the requisite training manuals to get you up to speed in short order. The clear benefit here is that established brokers have their established networks of commercial lenders. Therefore, you are not re-inventing the wheel. You are simply plugging into their network. Some have continuing guidance and mentoring. Others do not.

Cost is a major factor in dealing with established commercial loan brokers. Their training is seldom free. We see one company promising a complete training program including a few days at their New York headquarters. This is in return for several thousands of dollars. Another company offers a complete set of manuals and on-going support for a couple of hundred dollars.

What you are willing to spend relative to your perception of good value demands appropriate due diligence. As in every other field, there are a few charlatans in commercial lending who will not hesitate to liberate you from your ducats.

Developing clientele: The one advantage you have in the sales arena that does not accrue to salesmen of other products is the fact you sell money! Every business needs money to operate. Once you put the word out that you are the go-to person for commercial and industrial loans, businesses will come to you, particularly in this economic climate.

The ultimate question in considering commercial loan brokering is the question of income. How much money can you expect to make as a broker? It depends on you. If you work smart and do it full time, you can easily expect to make in excess of $100,000 a year. If you do it part-time, your income will be less. It depends on you.

One indubitable fact: There are a whole lot more difficult ways to make a heck of a lot less money. This is not rocket science. Anybody can do it.


What Should You Know About Capital Investments Before Enrolling?

Capital investments are very crucial to measure the health of the company. When business is making capital investments, it implies that they are self-reliant and assertive about the prospects and expect to expand their business. However, on the contrary, recessions are typically inter-related with reductions in capital budgeting and investments.

Even startups and growing companies can be capital intensive. It is a hard and fast rule that whatever companies survive in this universe cannot function without substantial investment. However before enrolling or digging deep into capital investments, you need to know all about the basics, types of investments and the pros and cons associated with capital investments.

Capital Investments- A Complete Overview

Capital Investment is generally described as the money invested in a business venture with a confidence of getting a return generated by the business efficiency and productivity. In a nutshell, the amount of money sponsored to a business for furthering its objectives or operations. Although there are different types of investments, let us look at the basic types of investment


  • They are a popular choice of investors who wish to acquire a steady income after their retirement period. This is usually a contract between the individual and the insurance company in which the investor gets a lump sum payment or a series of payment after a certain period of time. The main objective of this type of investment is ultimately getting a steady stream of funds after retirement.


  • Bonds are typically used by companies, municipalities, governments to finance projects and operations. In fact, bonds are often regarded as a good investment, in fact the Treasury bond is believed to earn good revenue for retirement. It offers low risk tolerances and generates a good piece of income. When you know how to handle risks involved with bonds then you can double your money. Some of the common risks associated with bonds are
  1. Interest rate Risk- The change in the interest rates might increase or decrease the market value of the bond which the individual is owning.
  2. Market Risk-Generally market risks are higher when you hold the bond for a longer period of time. There are instances where you need to sell the bond less than the money you have paid.
  3. Credit risk- Most corporate bonds are not secured by collateral and they are often referred to as debentures. The credit risk evolves from both the investor side as well as the insurance company when they failed to make their payments to their opponents.

Exchange Traded Fund-

  • It is marketable security that tracks a stock index, a commodity, bonds, or a basket of assets. Their characteristic resemble much like mutual funds because of both these type of investment trade stock in an exchange. ETF can provide reduced operating prices than the conventional mutual funds, flexible trading, increased transparency, and great tax efficiency in taxable accounts. So, since it was introduced in 1993, exchange-traded funds (ETFs) have surged in popularity with investors who were looking for alternatives to mutual funds.

Guaranteed Investment Certificate-

  • Guaranteed investment certificate often referred to as GIC provides a reliable rate of return over a fixed period of time, and they are typically funded by trust companies or banks. It is regarded as one of the best investment vehicle offering a plethora of benefits. Some of its notable benefits are low-risk investment with a guaranteed amount of return on the amount you have invested. For instance, when you deposit 500$ you are sure to get your 500$ back. However when you are investing in a stock market there are possibilities that either you can get higher than the money invested or way lesser. Apparently, with GIC, you ll have a guaranteed return and there is absolutely no risk involved.

Mutual Funds-

  • Rather than investing in stocks and managing money, mutual funds are fairly good choices. Since all the mutual funds are not created in the same passion, you need to have some knowledge before investment to avoid risk factors and to be aware how much money can you make out of this investment. However, mutual investments are regarded as the greatest investment tool for millions of people without the need to master finance. Most of these funds are redeemable, you can sell your funds at the NAV less of redemption charges. Some of the common types of mutual funds are
  1. Money market funds
  2. Fixed income funds
  3. Equity funds
  4. Balance funds
  5. Index funds

The level of risks purely depends on what the individual has invested on.

To Sum It Up

Capital Investment subject is like an ocean, there are plenty of things you need to understand and get familiarized with, especially the risks involved with each and every investment and the returns obtained.


Ways To Gain And Make Profit Through Capital Investments

While you as an individual or a firm, plans for the capital investments. The main motive behind is to multiply the initial amount of investment, over the small period of time. In order to receive the complete worth, depending upon the market forces. Though the financial sector of every economy involves a lot of ways, to earn and improve on the capital part overall. However, it is always better to search and analyse the ones, that are most suitable and feasible for the majority of the people who are leading the market. So that no stone remains unturned, for the success to be achieved.

Uniquely Designed Skills Set

Depending upon the demand and needs of the specific market place, you need to focus on the right path. So that you can achieve the expected results, through the least risk involved. Human skills with intellectual knowledge are the platform, that has proven to be the most wanted and appreciated sphere to gain the fortune through the virtually contributed capital investments.

Like a Psychologist, Psychiatrist, Heart Surgeon or the people who have been serving mankind. However such communities are very less in number and more in demand. So they stand at the point, where the chances of their services being paid highly increases. That results in the rise of the profit, achieved by them through their investment of time and expertise.

Direct Investment To Institutions

Capital investment with the banks or other financial institutions, bring the maximum profits. That too, at the minimum level of risks involved. It would be preferable to plan the long term investments of your hard earned money with the banks, that would offer you the high rates of interests on the capital you’ve saved with them. In fact, this process brings benefit for you on your investments that stay safe and risk-free till you want to withdraw the amount or profits generated through the lending of capital

The cycle of capital investment with the banks keeps generating more gains for you, over the initial amount of the capital deposited with the institutions. As the capital acts as the money lent, by you and you would receive the advantage of returns and profits that are resulting out of the same. You can stay assured when dealing with the most paying sources of the market in today’s scenario with the least involvement of risk factors.

Fixed Assets Or Lands

Capital investment on the property, land or machinery can be a great source of profits. That not only provides you with the increasing returns, years after years. But also acts as a leading source, which doesn’t require you to keep investing regularly in terms of time- money – skills etc. You can simply purchase machinery used in the industrial environment or any piece of property, that can be offered on rent to the companies or the individuals depending upon the use or location of the place.

Since one-time capital investment, offers you with the assured profits in the future. In addition to which, you can also keep increasing the rents or the charges attached to the usage of the asset. This brings you peace of mind and the surety of the investment, without any kind of risks involved in the process. Also making you feel an achievement, by gaining through your capital investments in the smallest possible time duration.

Revaluation Of Existing Assets

Along with various other methods of capital investments, you can enter into the business that carries the potential to multiply your initial investments; at the faster rate in comparison to the other resources available in the industry. That can easily be done, by investing in the expensive or wanted assets. Like a prime piece of land or property, that can be desired by a large number of people or company. Or any unique piece or art, that can be found rarely in the market.

Such capital investments offer an unbeatable chance to gain, as desired over and above the expected amounts. Since you have the leverage to sell the already existing asset, for more benefit and generate the profits. However, it is always better to invest continually in such fields. So that you can get the opportunity of earning big deals, on a regular basis without interruptions.

Multi-Level Investments

Taking into consideration, the existing scenario of the market. That is more of the risks involved and fewer chances of gains, you can always prefer to make and distribute the risk factor and achieve the chances of better gains and profits. For which, it is always advisable by the market experts to plan your capital investments in the different spheres. So, you would be the winner ultimately. Also getting the long term solutions, with the credibility and the reliable sources to generate more profits.


Venturing In The World Of Capital Investments

Many businesses close their operations because they don’t have the proper funding to extend business operations. However, nothing is impossible and change is permanent. There are several ways through which you can fund your company to build it properly to generate revenues steadily. Executives can improve performance by mastering several practices similarly business can grow based on the approaches they adopt.

When they don’t know to adopt the right strategy, they often struggle in managing not only the business rather their funds as well. By doing so, they miss out several opportunities that come along their way, apparently you can unlock and improve the overall capital investment performance by just mastering few practices that can turn a loser into a winner.

Capital Investment Should Be Your Top Priority

Capital investment is a step by step technique that businesses owners and entrepreneur follow to determine the merits of an investment project. The investors make use of the budget plan to decide whether investing with this type of business is worth considering,  Typically the budget plan explains about the company’s growth initiatives and the revenues the project will generate. Capital budgeting is often essential to

  • Set long term goals determining the prosperity of the business. Perhaps, the most influential in shaping the futuristic goals
  • It can evaluate the investment projects that can seek to compete in the industry and produce more profits
  • Capital budgeting has the potential to determine the future cash flows, how much money comes in and how much goes out and will it impact the business. Perhaps this is one of the important aspects certainly considered by the investors to accept or refuse the project
  • It can monitor and control the necessary expenditures and income required for the investment project. When the expenses are not properly monitored and controlled, it can cause a serious impact on the growth of the business.
  • Capital budgeting has the potential to make two huge decisions financial decision and investment decision. It can either make or break your business. So this should be your top priority.

Have A Collective Wisdom Of Your Organization

Tapping the collective experience of any organization is hard to do especially when your employers are handling multiple tasks. However, an organization’s collective experiences, wisdom, knowledge, and expertise have a significant impact on the growth of the business. Moreover, today workforces are very mobile and people are learning and enriching their skills and talents on everyday basis. So don’t rely on today’s story tomorrow may be different. Despite the increasing number of disciplinary activities in solving a business problem, you need new sources and ideas from experts from different businesses to provide the best thinking to produce more inputs that is best for the business.

Have A Clear And Well-Versed Business Objective To Handle Even The Difficult Situations

When it comes to personal financial planning, having a good business objective can certainly meet the client financial needs. Growth investors generally do not look for account income rather their primary objective is all about capital appreciation. There are four main investment objectives

Capital Appreciation:

  • Often referred to as appreciation stocks or bonds held by the investors, capital appreciation is an increase in the price or value of assets including real estates. The investors invest primarily in growth-oriented equity securities of large capitalization which is a taxable income.

Current Income:

If your intention is about current income, then you would be most likely to invest in stocks which pays a high dividend besides gaining consistent funds. This usually comes from interest payments, dividends, capital gains collected upon the sale of a security or other assets.

Capital Preservation:

It is a technique for safeguarding the funds you have in availability to invest generally through insured accounts. Capital preservation is generally used for investors who need to protect their money and cannot agree with even a small loss as they plan on spending the funds. In a nutshell, when you really want to keep your money safe, a capital preservation portfolio is indeed a trustworthy choice.


Although the speculator cannot be a true investor, yet they can make quick profits by using advanced trading techniques like shorting stocks, trading on the margin and on other special equipments. The major difference between investing and speculating is the amount of risk undertaken in the trade. Although speculation involves high risks, yet you can attain high amounts of returns.

To Sum It Up

Every company should have the potential to track return on investment (ROI) across the project life cycle, especially when business is designing a portfolio or annual budget. In addition, you need to streamline approval when evaluating the requests. However, the final forecasting should be done in a systematic and standardized way to become nimbler and more efficient.


Varieties That You Can Avail In Capital Investments

Companies make capital investments in order to create and abuse profit breaks. Capital investment performance can have a massive effect on an organization’s value, and it has the potential to drive growth and enhance overall revenues on invested capital. Generally when companies intended to expand or start with their new establishments, they build winning portfolios to achieve their strategy. But why do you need capital investments?

Reasons For Capital Investments

When companies and conglomerates are making capital investments it implies that they are assertive in the future and planned to expand their businesses by refining existing productive capacity. These missions typically encompass a large sum of cash. However, when you make poor capital investment decisions, it can certainly have a disastrous impact on the business. They are typically three main reasons for making a capital investment

  • to obtain extra or further capital assets for growth, empowering the business to, for instance, expand unit production, manufacture new commodities, or add value
  • With the advancement and development in technology, every industry is witnessing a mammoth growth in every aspect, so business owners often want to take advantage of the technology to increase their business efficiency thereby reducing costs.
  • The third main reason is to replace the existing assets majorly the fixed assets that include machinery, laptop, automobiles that have almost reached the end of life.

But how to get the investor and what are the varieties that you can avail in Capital investments?  Let us first see a quick summary of banking resources that can be a reliable funding source for the business owners

Bank Term Loans-

Term loans are monetary loans lasting between one to ten years which is paid back in steady payments over a set period of time. Generally term loans are provided to small or expanding business sectors for the purchase of fixed assets like machinery, factory, stocks, inventory which are essential to operate.

In addition, borrowing the cash as an alternate to procuring resources outright frees up working capital that can be used for other more productive purposes.

Bank Line Of Credit –

When you are looking to take out a loan, but not confident what will meet your needs then certainly the line of credit is an awesome option. You can get your funds in less than 24 hours with zero transaction fees through many banks just through mobile or online banking.

Lines of Credit provide the accessibility of readily available resources of money you can use for your business purpose. However, one downside of this funding source is, the fund limit purely depends on your credit limit.

Equipment Loan –

When you want to expand or modernize your operation or replace your worn-out machinery then equipment loan is probably the best option. Equipment loans can support emerging businesses finance for big equipment like automobiles, truck or heavy machinery. They are relatively easy to obtain provided you have a solid collateral to back your loan.

Since the lenders have very less risk funding this loan, entrepreneurs don’t have much difficulty in obtaining the loan. Apparently this helps maintain cash flow and provides extensive support in investing by setting tailored rent expenses to match cash flow and even seasonal cash flows.

Invoice Financing –

This is generally used for companies to finance slow paying accounts receivable for purchasing assets. Invoice Financing is done either through sales done by an immediate exchange of payment or through receivables involving line of credit. It helps businesses improve cash flow, pay employees and suppliers, and reinvest in operations and for business growth

Purchase Order Financing-

It provides businesses with cash to fill single or multiple customer orders. Perhaps, a funding solution for businesses that lack the cash. When you have a purchase order from a client and need financing to pay your suppliers, then you can certainly rely on purchase order financing that can help you pay costs to satisfy incoming orders. This can help businesses stay on track and keep up with purchase orders.

After introductory interest rate periods are over, on some loans, the rate of interest will obviously reset to a higher rate based on the market and your creditworthiness. So while choosing the resource, don’t always analyze the current expenses and cost instead make well-planned budgeting of the future rates and expenditures. Similarly, online credits are more expensive than bank credit line though it is quite easy to acquire the loan. Therefore, don’t determine only the ease of getting the loan approval rather have an overall perception of all the aspects before making a well-informed decision.


Many entrepreneurs while looking to start a business often get daunted about the best source of funding to seek for their startup. Apparently, the above-mentioned resources can help you choose the ideal funding source for your business.


Understanding Capital Investment In A Better Way

If you are planning or proposing to go big with your profession, it is essential that you understand the important role of Investment and Money Management for your business. It is a well-known fact that money comes in and money goes out. However, you need to know how spending money can impact attracting money.

Although many individuals are more aware about the importance of investments in wealth, retirement and savings, apparently when it comes to business, capital investments are equally important to make most of the profits that can make them grow year after year. In addition, Capital investment is important because it produces liability and measurability.

Any business owner who invests in projects without understanding the risks involved is often termed as an irresponsible owner because in the long run, your investment should yield profits though it has a few short-term downsides. But what is capital investment?

Everything You Need To Know About Capital Investment

The term capital investment or capital budgeting is the money invested in a business venture to further its business objectives either by purchasing fixed assets like stocks, inventories and, machinery or investing in some other resources that are expected to be productive over the years.

Perhaps, it is regarded as the most important measure in the health of the economy. When business intends to make capital investment, they know and they have confidence that they can grow their business by increasing their current capacity. Even the most money strapped business have enough capital to run their everyday business. They generally do by bootstrapping the business, it is nothing but scrapping as much as money from the savings as well as from family and friends to ensure the smooth functioning of their business.

For example, a restaurant might need some capital investment to include bar in their premises.  Opening a bar is a good investment if your business is located in the right location, otherwise the situation becomes challenging. Or upgrading the restaurant kitchen with the newer tools that can fasten the process and make the cooking more delicious. These are a few examples of capital investment need.

When you need some investment, investors or the bankers doesn’t provide funds out of friendship or courtesy rather you need a solid plan to justify your investment needs. They look at the investment plan, business model and the owner who is running the business and determine whether it is worth investing. Most investors don’t want to take risks, so they make certain before taking the decision. What are funding sources through which you can get a capital?

Typical Funding Sources For Your Business

Here’s an overview of seven typical sources of financing for start-ups

Personal Assets –

This is an amount of money or possessions that is invested in a resource or person expected to produce income or profit. It could be any item of economic value possessed by an individual or corporation, especially that which could be converted to cash. Examples of personal assets are cash, securities, accounts, real estate, car and other properties.

Venture Capital-

This is a type of investment typically done to a new or expanding business that involves a minimal amount of risk. These investments are generally done by the private investors who are normally referred to as venture capitalists when they are confident that the business will yield long term growth. In a nutshell, Venture capital funds are usually renowned or prominent by industry sector and segment provided to the early stage companies that are deemed to have high potential growth.

Business Incubators –

They are again companies that help emerging or startup companies towards speeding up the growth and develop them through services like management training or office space. By doing so, the entrepreneurs enjoy collaborative work with their investors. Business incubators are typically sponsored by municipal entities and public institutions like colleges and universities. They help solve the problem with related to establish an expanding business by sponsoring workspace, seed funding, mentoring, training and few others.

Bank Loans-

Unlike crowdfunding or investors, startup loans are conventional cradles of small business funding. Perhaps, bank loans are typically the best source for starting a business. Getting a business start-up loan from your bank or credit union is the common approach adopted by most entrepreneurs. Generally, bank loans offer plenty of advantages when compared to other forms of funding sources, moreover, they are more secure and in fact a personalized service during repayment. You can repay your loan amount and it does not become a pointless burden for you.

Bottom Line

Many entrepreneurs and business owners, often, struggle manage spending on hundreds or even thousands of capital projects and therefore miss out considerable development and productivity opportunities as a result. However, when you come across good funding sources, you can obviously improve your business.