HOW BUSINESS FINANCE CONSULTANTS EARN

The Business Finance Industry provides a number of different income streams offering residual income over months or even years, like account receivable and factoring.

YOUR EIGHT INCOME STREAMS

Leasing – Vehicles & Equipment

Companies can gain distinct advantages of Leasing their vehicles and equipment, as it presents definite tax benefits. We will show you how and where the best opportunities for Leasing are for your Clients. Your earning potential can be quite substantial of earning between 3% – 15%. Many lenders will automatically provide customer protection, i.e. meaning that if your customer would like   to Lease other equipment later on, you will automatically receive ongoing income. In such way if you create a network of customers you can build an ongoing income stream.

Asset Base Finance – Working Capital

Asset based finance is a more flexible way of how a client company can raise working capital. The main lender or finance house does not need the same controls as with other forms of funding. Any key assets held by the clients, be it equipment or property can be used to raise the necessary funds. You can be instrumental in helping your clients and know how and where to go to get the funding they require. Your commission on these type of transaction will be between 2% – 8%, depending on the size of the loan and the type of collateral involved.

Property & Development Finance

There are a wide range of property funding options which are available to the market. The potential customer base looking for competitive finance is as wide as the number of Lenders, all with their own speciality of engagements. Ever since the banking crisis, it is the High Street Banks in the main that have stopped or heavily curtailed their property lending activities. There are now many independent Lenders who do not have the high street network of offices throughout the nation. They therefore need and use intermediaries extensively to bring new deals. Knowledgeable and well qualified intermediaries can make substantial income in this market segment – usually ranging from 1% – 3%, keeping in mind that the majority of these transaction are up to several millions of pounds. It is essential that as a knowledgeable consultant you understand the different finance options available so you can advise customers and process their applications successfully.

Buy-to-Let Funding

The number of companies owning buy-to-let portfolios has increased dramatically over the last 20 years. Even more so as the property boom over the last decade has made it more difficult for many people to purchase and buy their own homes. There are many but-to-let companies, both large and small now operating in this field. Some are 1- or 2-off owners, but many are more substantial companies who own dozens or even hundreds of properties. These all require money to purchase, re-furbish and raise money against their portfolio in order to grow or stabilise their operations. Every city, town or hamlet contain buy-to-let owners, meaning a number of potential customers may well be living in your street or your part of town, some owning portfolios worth several million Pounds. Your earning potential in this market segment is literally based on how much time and effort you can spend here – borrowing requirements can be substantial – providing a chance to earn commissions of between 1 & 3 %.

Sale & Leaseback – funds for your Clients.

A funding method often overlooked is for your customer to use an existing asset and sell it to a Leasing company and rent it back for an agreed period. This type of finance is a very painless way for your client to raise operating capital. There are specialised companies that lend in this business segment which are keen to work with any intermediary who brings them new business. The amounts of money raised for your customer in this way can be very substantial, and for longer periods. Commission potential therefore can be substantial as well – and ranges from 1 – 10% against the amount of monies borrowed by your client in this way.

Factoring – funding using outstanding invoices.

Many companies up and down the land will tell you that getting paid on time is one of the biggest challenges of running any business. Credit Control occupies full time employees or even whole departments in certain companies. Yet in the meantime the management of the company is struggling to balance the books, to pay salaries and other operating costs or in investing in new developments for the company. Factoring in such case can be a positive way of raising working capital by utilising the outstanding debts your client has. The specialised lenders in this field will buy the outstanding debts of a company at a discount, and then professionally proceed in collecting these debts, without upsetting the debtor, as not to discourage them to continue to do business with the supplier, your client. These type of funding arrangement can be quite lucrative, as clients will usually continue to use factoring for a longer period of time – i.e. you as their consultant should receive a commission every time a new batch of invoices are purchased. A commission level of 10-15% of the factoring company’s income can apply.

Accounts Receivable Finance

The financial fortunes of companies vary tremendously depending on the type of business they are in. A quick cash income business has different problems than companies who provide goods or services against accounts, say they have to wait 60 or 90 days to get paid from their own customers. The business might be sound and the customers pay on time in the whole, but your customer’s cash flow is difficult to manage. The solution for this type of business is often an Account Receivable funding scenario. At the time of invoice an Accounts Receivable Lender will issue a certain amount of loan or finance, or group of invoices. Your role as Business Finance Consultant is to advise the client what the best option is. For this you need to ask some specific questions and then match it with the correct lending solution. Your remuneration again can be in the 8 -10% range subject to the specific criteria and lender terms and conditions.

Acquisition Finance

Merging and Acquisitions as well as the takeover or purchase of a competitor in many industry segments are an everyday occurrence. The type of funding, i.e. structured finance can be complex and highly specialised. However once a company is in the market to make an acquisition, the experts in this field will be happy to get involved. In this case having your eyes and ears on the ground is essential, as in any business environment your knowledge of who is requiring finance and the reason is a key aspect of your ability to close deals. Some of these type of deals can take time to close, but as and when they do, your income can be substantial, i.e. 1% – 2% depending on the level of your involvement.

Disclaimer: the examples in this documents as it relates to commissions and earning potential serve for illustrative purposes only. Any commissions or Fees are subject to market conditions and the participants in any segment or transactions. Any earnings are dependent on the time and effort extended in building your new business and are subject to the input of the borrower and lender of a particular transaction.

Mr BrownHOW BUSINESS FINANCE CONSULTANTS EARN