Why Accountants Are Introducing Their Clients to Commercial Finance Brokers
Your clients come to you when they need capital. Whether you can signpost clearly or send them to Google has a real impact on the outcome they get and how they perceive the value of your relationship.
Your clients come to you when they need capital. They ask about loans, they ask about grants, and sometimes they just ask what their options are. Most accountants are not set up to answer that question in full, and nor should they be. But the way you respond to it, whether you can signpost clearly or whether you send the client to Google, has a real impact on the outcome they get and on how they perceive the value of your relationship.
What your clients actually need when they ask about finance
When a client asks how to fund a £150,000 equipment purchase, or whether they can borrow to fund a period of growth, or what their options are after the bank said no, they are not looking for a mortgage broker recommendation or a generic bank referral. They need someone who understands commercial finance, has access to the right lenders across the market, and can structure the deal correctly for their situation.
That is a specialist function. If you cannot provide it directly, the next best thing is knowing exactly who can, being able to make a warm and credible introduction, and staying involved enough that the client comes back to you with the outcome.
The conversation does not need to be lengthy or formal. Most accountants who have established broker relationships simply mention it naturally when the topic arises: that they work with someone they trust in that space and are happy to make an introduction. The client does the rest.
The risk of leaving clients to navigate this themselves
Business owners who approach lenders directly, without guidance, often end up in the wrong product at the wrong cost with the wrong lender for their situation. They may take the first offer rather than the best one. They may not fully understand the personal guarantee they are signing. They may apply to multiple lenders in quick succession and damage their credit file in the process.
When things go wrong, or when the terms turn out to be more onerous than expected, clients often come back to their accountant. A reliable referral relationship with a commercial finance broker means your clients get better outcomes and you remain the trusted centre of their business advisory network, rather than the person they wish they had spoken to earlier.
The regulatory position for accountants making introductions
This is often the first question accountants ask. The answer, in most cases, is straightforward. Commercial finance to UK limited companies for business purposes sits outside the FCA consumer credit regime. There is no regulatory requirement for an accountant to be authorised in order to make an introduction to a commercial finance broker, provided the borrower is a limited company seeking finance for business purposes.
This is different from mortgage or consumer credit introductions, which do carry regulatory requirements. For the typical accountant referring business clients to a commercial broker, the regulatory position is clean. If you have any uncertainty about your specific situation, it is worth a quick conversation with a compliance adviser, but for most practices this is not a barrier.
What a good broker relationship looks like in practice
The best referral relationships are built on a few simple things: transparency, speed, and honest communication. Your client gets a response quickly, is told clearly what is and is not achievable, and is not passed around between departments or left waiting for callbacks. You are kept informed at key stages without needing to chase. There are no surprises.
From your perspective, a good broker also feeds information back in a way that is useful to you as the client's accountant. If the client's credit position is weaker than expected, you want to know. If there is a structure that has tax implications you should be aware of, you want to be in that conversation. The broker and the accountant working in parallel rather than in silos produces better outcomes for the client.
How referral fees work
In commercial finance, where a deal completes, a referral fee is typically paid to the introducing party. The amount varies depending on the size of the deal and the product type, but it is standard practice and most reputable brokers are transparent about their fee structure from the outset.
The referral fee is paid by the broker from their own commission, not as an additional charge to the client. Clients should be informed that a referral arrangement exists, which is standard practice and does not create any conflict of interest, provided the broker is recommending the most suitable product regardless.
The long-term value of a strong referral network
Accountancy is increasingly a competitive profession. Clients have more choice than ever and the services they expect from their adviser have expanded well beyond compliance and tax. The practices that retain clients for decades are the ones that clients feel genuinely look after their commercial interests, not just their year-end numbers.
A reliable referral relationship with a commercial finance broker is one component of that. It costs you nothing to establish and, when it works well, it produces better outcomes for your clients and strengthens their confidence in you as a rounded business adviser. That tends to generate referrals in the other direction too.
Building the relationship before the first referral
The best time to establish a broker relationship is before you need it urgently. A conversation now, an understanding of what the broker can and cannot do, and a clear picture of how they operate means that when a client comes to you with an urgent funding need, you are not scrambling to find someone you can trust under time pressure.
A good broker is also a useful resource outside of formal referrals. Being able to quickly check whether a particular deal structure is feasible, or whether a specific lender is likely to look at a certain type of client, is a useful capability to have in your advisory toolkit even when it does not directly result in an introduction.
LoanLogic works with accountancy firms across the South West to support their clients' commercial finance needs. If you would like to understand how a referral relationship might work, Ben would be glad to have that conversation. Email ben@loanlogic.co.uk.
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