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t want to pay your retainer fee - I say
skip them. And those who can't or don't want to pay the high risk
interest rates when you let them in on the real facts of life -
forget them too. And those that have been turned down b y
practically every lending institution in the country, I would advise
you - let some beginner gain practice on them. And these are the
ones you need to learn to spot while you are a beginner.
You should determine exactly how much cash and other assets your
client can or is willing to put into his proposed business. You'll
have to be satisfied with the character of your client as a
borrower; his record of paying his bills, how he gets along w ith
people, and his overall chances of success. You'll have to do the
checking of his references and credit record. You'll have to judge
how he'll make good on the loan if the business goes sour. When
these questions are answered to your satisfaction, you can go on
with helping him put together a proper loan proposal and work toward
getting him the money he wants.
Most successful money brokers charge according to the size and type
of loan being requested. This is based on the amount of work they
have to put in to place the loan. If it looks like a pretty solid
business with a good record on the part of the borro wer, and good
collateral, the fees are usually lower. On the other hand, if it's a
high risk proposal or if the borrower has very little business
experience and you' re going to end up doing a lot of selling to get
the loan approved, your fee should be accordingly higher.
Remember that not all loans are approved, even though they might
have looked good to you in the beginning. With this in mind, you
have to charge for your services and make up for the time you spend
with those proposals that don't get approved by chargin g and
collecting on those that do get approved. An example of the typical
commission charges is shown below.
Loan Amount Your Fee Commission
$5,000,000 1/2% $25,000
$2,000.000 1% $20,000
$1,000,000 1.5% $15,000
$500,000 2% $10,000
$100,000 3% $3,000
$50,000 4% $2,000
$30,000 5% to 10% $1,500 to $3,000 Under $30,000 10% $750 minimum
As we stated earlier, you can start this kind of business from the
comfort of your own home or apartment, and do very well. However,
just as soon as you can possibly afford to, it would be to your
benefit it to set up an off ice with access to the gener al public.
Your success and gross income will definitely benefit with an
office.
You should set up your operation in a prestige location within or
fairly close to the business and financial district in your area.
Basically, this will be for impressing your clients, but at the same
time, by locating in or near your local loan sources , you'll
quickly come to know the important people on a first name basis.
Perhaps the best idea would be to sublet space in a suite of offices
used by an insurance company, accounting firm, or a group of
lawyers. An arrangement can often be made for their receptionist to
answer your phone calls and receive your clients. With a little bit
of finesse, you might even be able to have one of their secretaries
handle your typing and filing.
Your office should be neat and functional, but still impressive. A
large desk, comfort able chair and a credenza; perhaps a four-drawer
file cabinet also. The i
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