The Various Roles, Banker, Broker and BDO - Small-Business-Loans ...

Being the person that your client is most familiar with is a yes person. They do not want to say anything but yes to their existing banking client. Yes they will get the loan done, Yes they will fund the loan in less than thirty days, yes the rate will be the very best in the market. However, you have to realize that the banker, unless it's a very small community based bank has no underwriting authority. The last thing that the banker wants to do is upset the client banking relationship. For that reason only they say yes to everything. The client leaves the bank excited that their SBA loan or business loan is going to be approved and then they wait for the eventual phone call when the local banker stammers and finally has to admit that the underwriter, (that nebulous person in Corporate whose only responsibility it is to get all the square pegs in the square holes hole before they approve the loan has denied the loan. Your client has no relationship with that person before they try to get a loan approved. The BDO as he /she is known in the industry is a commission sales person who accepts the loan package in the name of their institution that they represent. The BDO works specifically for one institution, and if the loan does not fit their parameters the loan is denied. The BDO, will always tell the client unless it's a loan that is obviously never going to get approved that the loan parameters that the client has laid out are exactly what the Institution is looking for. The BDO will not work the loan unless its clear that the loan will get funded, they have so many loans that they are trying to process that the loans which are the cream of the crop get the attention the other loans unless someone is following up on a regular basis will fall to the bottom of the barrel. The BDO will get compensated from their institution when and if the loan is approved from the sale of the loan in the marketplace. Typical titles for BDO' are Senior Loan officer, VP Business Development....

Read more...