I've done a few financial models for loan brokerage clients, and I've decided to build a public-facing custom version that I think fits the most types of scenarios and strategies. This includes three main types of loans, and the fourth channel is deal volume for investment banking / capital advisory strategies. They are similar but have some differences in logic that are relevant.
After purchase, the template will be immediately available to download. It is also including in the direct lending businesses bundle, the industry-specific bundle, and the Super Smart Bundle.
At the core of this business model, the company is making a percentage on closed volume, whether it be loans (residential mortgages, commercial, or SBA) or facilitating various types of deals. You will have the ability to define leads per month by channel type and a set of funnel percentages to end up getting down to closed transactions per month.
I made a few general changes to the way this model defines equity investments and startup costs that are different than you normally see on my fully integrated templates. For this, there are 5 investment rounds that can happen at different times and there are initial startup costs that can happen within the first 24 months instead of only all up front. These are two of the most requested changes I have made from clients for models so now it is going to be the new default.
Template Features
- Model up to 5 years.
- Monthly and annual granularity.
- Cash flow planning / equity investments.
- IRR, Equity Multiple analysis.
- Complete direct labor and other direct costing schedules for each type.
- Direct costs and revenues scale with volume dynamically.
- Includes terminal value.
- Includes 20 charts.
- Sources and Uses (high level and detailed).
- Leads per month.
- Average time to close (months) this offsets revenue.
- Funnel conversion rates: (Lead > Application), Application > Approval, Approval > Close Loans
- Average loan size and annual growth of average loan size.
- Revenue:
- Broker Fee (% of loan)
- % of loans including fixed fees
- Fixed Fee per Closed Loan
- Lender Premium
- Direct Labor Costs (including hours per task in funnel and wages):
- Loan Officer Commissions (percentage of revenue earned)
- Lead Processing Labor
- Processor / Fulfillment Labor
- Processor / Fulfillment Labor (2)
- Labor efficiency factor.
- Marketing
- Costs per Lead
- Cost per Funded Loan
- Credit Reports / Underwriting / Miscellaneous
- Cost per Application
- Cost per Approved Loan
- Cost per Closed Loan
- To display headcounts, there are capacity assumption as well.
- Relationships started per month.
- Average time to close and month # mandate starts after the relationship starts.
- Conversion of new relationships to mandates.
- Conversion of mandates to closed deals.
- Average deals size and annual growth of size.
- Revenue:
- Broker Fee (% of deal)
- % of deals including fixed fees
- Fixed Fee per Closed Deal
- Lender Premium (may not be relevant)
- % of Deals Paying Retainers
- Retainer Amount (earned per month between start of mandate and close month)
- Direct Labor Costs
- Director / Advisor Commissions (percentage of revenue earned at close)
- Lead processing labor.
- Analyst labor (work a define number of hours per active deal per month)
- There is a Full-time employee expense schedule as well (FTE).
- Other direct costs include costs per lead and other fixed costs per closed loan.