How I'd market a loan broker business

Last week I boiled down 25+ years of finance experience into eight different areas of focus. Five of those were mostly related to personal finance and the other three were related to business finance. The last one I shared on the business finance side of things was the most important skill you can have as a founder that will completely alter your financial outlook. That was my belief that Marketing and Sales were the most important skills you can have.

There are plenty of other skills that you will need to master as a founder. More on that next week.

However, without paying customers you don’t have a business, you have a hobby.

The best way to market a business varies based on the industry you are in, the resources you have, and other factors. Including, how unique your business model is.

When you have a truly unique product or service, your Marketing efforts become more about educating the market on why your way of solving their pain point is the best. I experienced this when I launched my first startup in 2010. At that time, we were the first online business-to-business networking site that connected professionals face-to-face. When we were launching, social media was just starting to reach a real growth curve and a lot of professionals believed that networking online was the only way to go. They just didn’t understand why face-to-face meetings mattered (because they allow you to build trust faster). Had there been other competitors in the market there would have been less of a need to educate the market.

If your business model is more commoditized, then your approach to Marketing requires less of a focus on educating the market that you can solve their pain point and more attention on why your business is different. A good example of this is realtors. Any realtor can help you sell your home. The really good ones differentiate themselves through their work ethic, the connections they have, etc.

That is also true for loan brokers. There is no shortage of lenders that will give a business capital and any commercial loan broker can source a deal. Because capital is largely commoditized, commercial loan brokers have to find a way to stand out from the competition.

How I market my commercial loan broker business

If you have taken my course on starting a commercial loan broker business then you will already know my favorite way to attract borrowers. Building a referral network is the single most powerful Marketing approach. Imagine having established relationships with referral partners, who already work with the types of clients you like to help, and they funnel opportunities your way. Some of the best referral partners are small business attorneys, accountants, and business brokers. If you build a successful network then you shouldn’t need to cold call or run paid online ads.

This approach is exactly how I market my business. That said, it takes time to build up a network. Other brokers or lenders have likely built relationships with those referral sources. So, you will need to find a way to differentiate yourself.

One way I do that is by sharing the volume of deals that I have been involved with, over $800M. That tells the potential referral partner that I know what I am doing and can get deals done. You may not have that level of experience. If not, it helps to be part of a network of brokers. One of the benefits people who take my course get is the ability to say, “I’m part of a network that has done over $800M in deals.”

If you are new to being a loan broker, there are other ways to market yourself. I advise a lot of the newer brokers that I speak with to focus on a niche. That niche could be specific types of loans or specific industries. By focusing on a niche you can quickly become an expert in that area. For example, you might be an expert in equipment financing deals, like my student Sid.

One final way I market my business is by offering to pay referral fees. That is not always possible, depending on the referral partner’s industry or company they work for. If that is the case, I still look for ways to make referring business to me worth their while. That can look as simple as handling their referrals professionally so as not to hurt their reputation. Or, by looking for ways to refer business back their way.

Why I don't recommend online ads

I’m not opposed to online advertising. Building up a referral network can take time because receiving referrals is often built on trust.

So, for loan brokers who are looking to get started quickly, it can be necessary to run online ads.

The challenge is that competing across high-volume keywords, such as business loans, can be very expensive and have very low click-through rates.

I’ve personally tried ads in the past and even when my marketing funnels were set up well, the quality of leads I got was not good. In my experience, online ads tend to attract borrowers who are not fundable or are “tire kickers.”

Still, online ads can be beneficial for branding purposes.

Why I don’t buy leads

I won’t spend too much time here.

There are companies that are better at marketing online than I am. So, they likely have better results than my personal experience.

Regardless, I have never bought online leads. From speaking to other brokers, I have rarely heard a success story.

Just like most other businesses, there are no real shortcuts to quick success. Building up a referral network takes time. But, it is the best marketing approach in my opinion. Particularly for building a loan broker business that lasts.

If it helps, I currently have over $20M in business loans in my pipeline. Every single one of them has come either from my network or from a referral.

Thank you for subscribing!
Please check your inbox for a link to confirm your email address.

Read past issues

Jun 15
Go-to-Market Made Easy: Your Roadmap to Customer Acquisition
May 24
Planning for a Second Act + a sabbatical
May 05
This isn't 2008. But, it's not that much better
Apr 20
Market Whisperer: Knowing Your Customer Better Than Investors
Apr 14
Energized > Rested
Apr 07
Numb the pain, silence the teacher
Mar 31
The Myth of the Big Exit
Mar 23
Growth Gears: Equity vs. Debt - Fueling a Startup’s Journey
Mar 16
A candid conversation about fear
Mar 09
The Technical Product Managers Guide to Go-to-Market
Mar 03
My goal was 100 financial plans. I did 10x that goal.
Feb 25
Poor MVP, no one likes you
Feb 24
Beyond Bytes: Why Interpersonal Skills are the New Power Tools for Success
Feb 17
This one question changed how I looked at contingency plans
Feb 10
From $100k -> $75M - this week's fundraising lessons
Jan 27
The next big finance opportunity
Jan 20
This is how long a startup funding round lasts
Jan 09
How I'd market a loan broker business
Jan 02
25+ years of finance experience in less than 5 minutes
Dec 28
How to have a stress-free relationship with money
Dec 17
How to buy a business with little money down
Dec 12
Want to 10x your business? Try the strategy that most people fear.
Dec 05
Why being loan-specific as a loan broker is best
Nov 28
The Power of Micro Markets
Nov 19
Defining success criteria helps remove analysis paralysis
Nov 12
Lessons from acquisitions
Nov 07
My business plan cheat code
Oct 28
Everyone is missing the real point about being overworked
Oct 22
Why you should have a "How to work with me" manual
Oct 18
Selling eggs - my quiet ambition
Oct 13
Breaking Free from 'Meh': The Hidden Impact of a 7 Rating in Life
Sep 24
From Software Engineer to Commercial Loan Broker
Sep 23
A personal message about the importance of your health
Sep 16
Is the SBA 8(a) program going away?
Aug 21
What is a search fund?
Aug 14
My guidelines for speaking engagements
Aug 07
The Ultimate Guide to Picking the Perfect Lender for Your Business
Aug 05
Built to sell - pricing strategies that work
Jul 22
My framework for building impervious value propositions
Jul 12
How to force tradeoff decisions
Jul 09
How I'd Start a Freelance Business Today
Jul 05
The Bookends of Product Management
Jun 28
From the C-suite to Product; How I got here and what you can learn from that
Jun 17
My Digital Detox Experience
Jun 10
AI copywriters wrote this blog post
Jun 03
The SBA Just Made Business Acquisitions Easier
May 27
The power of index investing funds
May 20
The most important skill for entrepreneurs
May 06
I churned out 46,000 words in 90 days using this writing process
Apr 29
⏰ NOW is the time to turn your finance career into entrepreneurship!
Apr 22
How to build your own financial plan in under 1 hour
Apr 15
Define your audience first, then design your product
Apr 08
Getting a business loan just got harder
Mar 25
This one question is jet fuel for productivity
Mar 24
Are the rate hikes over?
Mar 18
This tool removes decision fatigue
Mar 11
The one stat keeping us out of a recession
Mar 05
One key reason raising startup funding is so hard right now
Mar 04
My framework for quickly launching profitable products
Feb 16
What’s the average business loan interest rates?
Feb 13
Everything you need to know about business loan rates
Feb 10
This one tool made me a better entrepreneur
Jan 25
This one-pager is perfect for brainstorming business ideas
Jan 18
Stop making this mistake with your startup’s target market
Jan 11
Powerful tools for researching competitors
Jan 08
User persona template demo
Jan 04
They should take my Marketing degree away
Jan 01
How to confidently charge your worth
Oct 02
Building wealth with Restricted Stock Units (RSUs)
Sep 11
What I’ve learned as a startup analyst for an angel investing syndicate
Jun 24
My favorite economic analysis tools
May 29
Which SBA Loan Has the Lowest Down Payment?
May 01
The Power of a Decision Matrix
Apr 24
Things to consider when buying a business
Apr 17
Buy a Business vs. Start One
Mar 31
How do Micro SBA Loans work?
Mar 03
Common Investor Term Sheet Components
Feb 15
3 Step Process for Generating Business Ideas
Feb 06
Thoughts on <my first Angel Investment>
Jan 11
Lessons from writing over 1,000 words per day
Jan 06
There Are Two Main Types of Business Plans
Dec 09
The Best Pitch Deck Templates