Direct lender vs broker: what changes when the lender makes the decision

An equipment finance broker takes your application and sends it to a list of lenders. A direct lender reviews it and makes the decision itself. iFinancial Group is a direct lender: the file is underwritten here, in house, and it isn't shopped. That one difference changes the speed, the number of people who see your information, and what happens when a file doesn't fit as submitted.

Who you're dealing with

iFinancial Group has funded equipment since 1997, roughly $600 million of it, in all 50 states. We're a direct lender, not a broker, so the file is underwritten in house and not shopped around. Our customers have ranged from independent manufacturers to global technology companies. We've barely advertised in almost three decades. The business came from repeat customers, referrals, and vendors sending us their customers.

Who makes the decision

With a broker, the person you're talking to doesn't decide anything. The application goes out to several funding sources, each one pulls what it needs, and the answer depends on whoever comes back. The broker is paid by the lender that funds the deal, which shapes which lenders get your file.

With a direct lender, the person you're talking to works for the company that writes the check. The application is reviewed in house, the credit decision is made in house, and there's no third party to wait on. That's why decisions here are typically same or next day: there's nobody to forward it to.

Where your file goes

A shopped file gets pulled by several parties. Each one sees the business, the owners and the tax ID, and each inquiry sits on the record. A file submitted to a direct lender is reviewed once, by one company, and goes nowhere else.

Shopping has a place. A file with real problems sometimes needs to be seen by several lenders to find one that will take it. For a business that expects to be approved, it's mostly a cost: more people with your information and more inquiries, for the same answer you'd have gotten from one review.

What happens on a decline

A broker sends a decline email, because the broker didn't make the decision and can't change it. A direct lender made the decision, which means a direct lender can call and talk about restructuring: a different term, a different structure, more down, a guarantor, a piece of the deal rather than all of it. When the decider is on the phone, a decline is the start of a conversation instead of the end of one.

The same holds after the deal funds. A question about a payment, a payoff, an early buyout or adding a second machine goes to the company that holds the paper, not to a middleman who has to ask.

How to tell which one you're talking to

Three questions settle it. Who makes the credit decision on my file? A direct lender says we do; a broker says it depends on the lender. Will my application be sent to other companies? A direct lender says no; a broker says yes, that's the service. Whose name is on the agreement I sign? A direct lender's own; a broker's answer is whichever lender funds it.

There's nothing wrong with a broker who answers those honestly. There's something wrong with a company that calls itself a lender and answers like a broker. Ask the questions.

Where a broker can be the better call

Honest about the trade: a broker is built for the file that needs to be seen by many lenders, the unusual equipment that only one specialty funder touches, or the borrower who has already been declined twice and wants someone else to make the calls. If that's the situation, shopping the file is the point, and a broker earns the fee.

For a business that expects to qualify, buying standard equipment, with a deadline, a direct lender is one review, one decision and one company with your information. That's the file iFinancial Group is built for.

How it works with iFinancial Group

It's the same one-page application whether the equipment is small or the deal runs to $1,000,000: no tax returns and no audited financial statements to apply, no minimum and up to $1,000,000. Decisions typically come back within 24 hours, and an approval holds up to 60 days. New and used equipment, terms up to 84 months, and soft costs up to 30% so freight, setup and training can go in the same deal. Payment structures beyond level payments are there when the equipment earns unevenly. We've been doing this since 1997, in all 50 states.