What Makes a Good Loan Broker? Is it How Much You Fund?

What Makes A Good Broker?

Through the plethora of recruiting ads by brokerages, funders and lenders, trying to draw people into the space through promises of lucrative paydays with minimal work, one has to stop and wonder, who are the actual good brokers? What do they look like, sound like, and dress like? How is their personality? How is their work ethic? How can you spot them in a crowd?

There are a number of things that make a good broker, a good broker, but for the sake of this discussion, I wanted to begin with expectations and measurements of funding volumes.

LIMITING THE MEASUREMENT

A broker can have a good month, a good quarter, and even a good year, so to truly judge the quality of a broker’s work, I believe you have to start the measurement over at least a 24 month time period. This would smooth out things that usually plague sales professionals such as down times, seasonal periods, stall periods, dry spells, artificial market boom and bust periods.

One won’t even be able to complete this measurement on most brokers entering the space, as most of them will be out of the industry within 3 – 6 months. I believe that success in our industry is mainly due to having leveraged resources that give you a competitive advantage, rather than actual superior “selling” capabilities. 20% of brokers will have these resources and 80% will not.

MEASUREMENT TIERS

From my research, these are the measuring tiers that can be utilized to gauge the quality of a broker over at least a 24 month time period. These numbers include both new and renewal funding volumes. With renewal merchants, even though you are dealing with the same client, they still require a new underwriting process with new offers being generated, thus requiring a new sales process or another “close.” As renewals are the lifeblood of our industry, many brokers have a plan in place to build a renewal portfolio and “sit back”, thus we shouldn’t only factor in new deals to this measurement.

• $300,000 plus a month in funding average: The Superstar Broker Level
• $150,000 to $250,000 a month in funding average: The Good Broker Level
• $75,000 to $125,000 a month in funding average: The Average Broker Level
• $25,000 to $50,000 a month in funding average: The Rookie Broker Level

If you have been a broker for at least 24 months, what is your current standing? If you are currently at the Rookie Agent level or the Average Agent level, what do you think you can do to get to the Good Agent level or the Superstar Agent level?

NOT ALL BROKERS ARE EQUAL IN TERMS OF OPERATIONAL STRUCTURE

These measurement tiers are only for individual brokers and not for total funding volumes completed by an entire office of brokers.

But also understand that other variables might be at play for an individual broker as well, such as the fact that he might be a sub-broker to a large brokerage house that feeds him warm leads all day, and his job is just to come in, sit down and focus only on the selling/closing part of the process. Or, he might be a part of a funder’s inside sales team and similar to the sub-broker, he gets warm leads fed to him all day to where he just needs to come in, sit down and focus only on selling/closing.

If you are currently in the sub-broker or inside sales team setup, it’s understandable if you are in The Superstar Broker level as you have more leveraged resources, less responsibilities and more time to dedicate solely to your selling/closing process.

But if you are operating as a One Man Show, like I was, then (in my opinion) it would mean a lot more to consistently perform at either The Superstar Broker level or The Good Broker level, considering all of the administrative/operational tasks that you solely have to juggle on your own.

MY ONE MAN SHOW PERFORMANCE

As my office currently goes through restructuring, during my time of selling the product from late November 2009 until September 2015 (70 months), I averaged $200,000 a month in new and renewal funding volume. This would place me at The Good Broker level.

There were surely months when I funded at The Superstar Broker level of over $300,000 with even some months getting at or near $1 million, but those were not my consistent averages throughout the 5 years and 10 months (70 months) that I sold the product. During the 70 month time period operating as a One Man Show, I had to juggle many administrative/operational aspects including but not limited to:

• Completing my own secondary and primary market research
• Designing my own business plan, ROI formulas, and completing my own trend analysis
• Coming up with innovative ways to creatively and profitably finance my office
• Building business related credit
• Setting up my funder network and keeping up on their underwriting criterion
• Setting up agreements with warm data suppliers and other vendors
• Designing and running my own website
• Setting up and managing my own direct and in-direct marketing campaigns
• Running through my daily calls to warm data (averaged about 150 a day)
• Managing and following up with my sales pipeline
• Managing and following up with my current deals in underwriting
• Managing and following up with my renewal portfolio
• Managing legal aspects such as contracts, LLC requirements, keeping up on marketing laws, etc.
• Managing accounting, insurance and tax related aspects
• Managing retirement account aspects

On the side, I built a merchant processing portfolio on track to process close to $200 million.

To top everything off, I also managed to complete four college degrees (MBA and three bachelor’s degrees) during this hectic and stressful time period as well.

YOU MIGHT HAVE BETTER OPERATIONAL LUXURIES THAN I DID

If you have the luxury of being a sub-broker or a part of an inside sales team, with having a team of people to do a good chunk of the administrative/operational tasks listed above (that I had to manage on my own), then as mentioned, you stand a great chance of getting to and staying in The Superstar Broker level of performance in terms of funding volumes.

You want to just bring to the table a solid work ethic and professional competency, always with the passion, desire and ability to learn. You also want to be very efficient in time management. I believe that time management is a “skill” that must be honed and managed. As the English brewer Charles Buxton said: “You will never find time for anything. If you want time, you must make it.”