Guides8 min read
Business finance broker vs direct lender: which is right for your UK business?
Should you use a broker or go direct to a lender? An honest comparison of market access, costs, speed and support for UK business owners.
Tera
Going direct to a lender suits businesses that already know which provider and product they want; using a commercial finance broker may suit those who want to compare multiple routes from one prepared application. Brokers do not lend — they introduce cases to providers from their panel and may receive commission; a good broker adds value through market access, case preparation and specialist guidance.
What a commercial finance broker does
A commercial finance broker is a credit broker regulated by the Financial Conduct Authority (or operating as an Appointed Representative of an authorised firm). Tera introduces business cases to finance providers from an available panel. We do not lend, set interest rates or make approval decisions.
Whole-of-market introductions
Rather than fitting your requirement to a single bank's product, a broker can present your case to multiple providers whose criteria may suit your circumstances. See Tera's lender panel for the types of institutions we work with.
What brokers do not do
- Lend money directly
- Guarantee approval
- Set rates — rates are determined by the finance provider
- Provide regulated financial advice (brokers arrange; they do not advise which product you must take)
How Tera combines technology and specialist review
Tera uses technology to organise application information and identify missing documents. A commercial finance specialist then reviews your requirement, discusses suitable routes and manages introductions. Read more on why businesses use Tera.
What going direct to a lender means
Applying direct means submitting your case to one finance provider — your bank, a specialist lender or an alternative finance platform — without a broker intermediary. You deal with that provider's criteria, product range and timeline.
When direct works well
- You have an established relationship with a provider that knows your business
- You need a straightforward repeat purchase — for example, a replacement vehicle on an existing facility
- You have already identified the exact product and provider you want
Limitations of going direct
One provider means one set of criteria and one product structure. If your case does not fit — or if terms are not competitive for your profile — you may need to start again elsewhere. That takes time and may involve multiple credit searches.
Broker vs direct lender: side-by-side comparison
- Market access — Brokers: multiple providers from a panel. Direct: one provider's products only.
- Application preparation — Brokers: often help structure information and documents. Direct: you prepare to the provider's format.
- Comparing options — Brokers: one case presented to several routes. Direct: you manage separate applications yourself.
- Fees — Brokers: may receive commission from providers; any customer fee disclosed before proceeding. Direct: no broker commission, but you compare fewer options.
- Speed — Brokers: can save shopping-around time when documentation is ready. Direct: may be faster for simple repeat business with a known provider.
- Support — Brokers: specialist coordinates introductions and explains next steps. Direct: relationship manager at the single provider.
Costs and how brokers are paid
Customer fees
Tera does not charge for simply exploring options through the initial assessment. Any applicable customer fee is disclosed before you agree to proceed. See our FAQs on fees.
Provider commission
Brokers may receive commission from a finance provider following a successful introduction. This is disclosed in line with regulatory requirements. Commission does not mean the facility costs more — compare the total cost of the facility, including interest, fees and charges.
When a broker may be worth considering
- First-time commercial borrowers unfamiliar with product types
- Complex requirements spanning multiple products — for example, property and working capital
- Businesses declined or unsure after a direct approach
- Time-poor owners who want one structured process rather than multiple enquiries
- Younger businesses exploring what may be realistic — see our guide on finance under one year
When going direct may be simpler
- Strong existing banking relationship with competitive terms offered
- Repeat asset or vehicle purchase with the same provider
- Niche specialist lender you already understand and trust
Red flags — broker or direct
- Guaranteed approval claims — no legitimate provider guarantees finance
- Upfront fees without clear disclosure of what they cover
- Pressure to sign documents quickly without time to review
- Unauthorised firms — check FCA registration via the regulatory information page
How Tera's process works
Start with a two-minute assessment. A specialist reviews your requirement, discusses possible routes and — where appropriate — introduces your case to providers from our panel. See how it works for each stage. No obligation to proceed.
Accountants and advisers referring clients can learn about our partner programme — 30% of Tera's net commission on every completed deal. For business loans and other products, explore our finance options hub.
Common questions
Tera Business Finance is a credit broker, not a lender, and an Appointed Representative of Moorgate Broker Network. Finance is subject to status and lender terms.
