Loan agency is a commonly used term in commercial capital markets to refer to certain classes of commercial loan financing, more commonly known as bilateral or syndicated loans. In both cases, an organization, also called a lender, must secure commercial financing from a financial institution or other individual that has the capacity to repay the loan. Typically, the financial entities that make up the finance industry are retail sellers, manufacturers, and wholesalers, who typically have small accounts. They seek to fund their short-term business requirements by borrowing money from investors that have a better financial return than a regular bank or private lending source. Loan Agency-PLAN A Mortgage
A loan agency can be a broker acting on behalf of an investor, or it can also be a middleman who contacts potential funding sources on your behalf. The primary function of a loan agency, in the capital markets, is to obtain capital for your company. These funds are primarily used for day-to-day operations and for expansion, but they do have a long-term capital purpose such as meeting outstanding obligations. The primary distinction between a syndicate and a bilateral loan is that with a syndicate, multiple investors provide funds for your organization while with a bilateral loan, you secure funds from one lender for a set length of time. A third distinction is that unlike the syndicate, which is usually referred to as team building for financing purposes, a bilateral loan is usually made for a specific purpose.
Loan agencies can also specialize in certain services including business lines of credit, commercial real estate loans, commercial loans, mortgage notes, and private placement assets. They may also deal in a variety of investment options, including treasury bills, corporate bonds, GIC’s, venture capital, and commercial real estate loans. While their primary function is to obtain capital for businesses, many of them have begun to provide lines of credit for personal investments, as well. As capital markets in the United States and globally continue to remain unstable and rely heavily on unstable currencies, the loan industry has taken a beating, and several brokerage firms have either gone out of business or completely eliminated lending services due to lack of business in the face of this financial crisis.