Business Loan Broker vs. Loan Officer

A business loan broker has responsibilities that are slightly different from that of a loan officer. Depending on what your business financing needs are, you might choose to work with one or the other. Brokers are more inclined to tend to your specific needs, while loan officers have the lender's interest in mind.

What a Business Loan Broker Does

A business loan broker assists companies in obtaining financing. They act as an intermediary between the company, and a network of several different lenders. Brokers are employed by companies that have difficulty obtaining the financing that they need, and earn a commission based on the deal that they help you close.

Brokers are independent parties that work with banks or private lenders in order to negotiate financing for the company that needs funds. Once they have analyzed the company's financial situation, they will determine which lender would be best. Different types of lenders that a loan broker might work with include private investors, credit unions, trust companies, or banks.

What a Loan Officer Does

Loan officers are employed by business loan lenders. It is their job to find borrowers and assist them with their loan applications. They can assist companies that need financing connecting them to the lender they work for only. Also called loan originators, loan officers are in control of communicating with borrowers and opening their accounts.

A loan officer is also paid a commission, based on the loan applications that are approved and sometimes are also paid a base salary. They are employees of the companies they work for and will offer you their company products only. The lender may charge a loan origination fee and other costs to the borrower, but the fees are payable to the company, not the loan officer.

Which One to Choose

If your business has established credit and you wish to work with one specific lender, a loan officer can best assist you in choosing the best business loan options. They will work with you and act as an intermediary between you and the lender that has employed them. Loan officers are loyal to their lender, and will only reveal the borrowing options that their employer has to offer.

Working with a business loan broker will present multiple options with multiple lenders. They shop the market for the best products on your behalf. If your company has had difficultly obtaining financing from one lender or another, it might be best to work with a broker who has a network of a variety of lenders at their disposal. You will pay a commission for this service, however this is probably the best option for those who haven't had success in borrowing from banks directly.