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How to Avoid Getting Ripped off by Small Business Loan Scams

by Irish Taylor Business Consultant
Keep these pointers in mind to avoid dealing with scammers as well as with unscrupulous credit agencies:

• Stay away from offers for guaranteed loan approval. A lot of lenders today include the “guaranteed approval” pitch in the brochures and pamphlets they release to prospective borrowers. They think that by providing instant approval, they can attract more personal and business loan applicants to sign up for the financing deals they offer.

Still, you should remember that a majority of legitimate lending firms today normally use screening procedures to identify who among their borrowers are worthy enough to receive lines of credit. Most of them check not just the personal but also the business credit history of entrepreneurs. In fact, some may even require applicants, like you, to make business presentations regarding their respective enterprises as well as their capabilities for repaying their financial obligations.

This goes to show that only illegitimate lenders forego running credit and financial checks on their business loan applicants and thus offer guaranteed loan approval. Hence, you should resolve to avoid them, as much as possible.

• Don’t strike deals with lenders that ask for upfront payment. Always remember that submission of down-payment is optional when obtaining business loans, especially if your enterprise has less-than-perfect credit rating. However, if your business has excellent credit history then, there’s no need for you to make a substantial down-payment to your target lenders, just to ensure the approval of your request for business financing.

Now, if a firm requires you to submit an upfront payment, regardless of your untarnished credit reputation then, it would be best to ditch their offer and look for more credible lenders that can provide your business a suitable financing deal.

• Steer clear from credit agencies that don’t have physical business addresses. A physical address or location is actually an excellent indicator of legal business operations. Hence, if you discover that the firm you wish to deal with does not have a physical business address where it accepts and processes loan applications then, you might as well stop negotiating with it. Instead, look for reputable and trustworthy firms nearby and inquire about the financing programs they offer to small- and medium scale business owners, like you.

• Avoid small business loan offers that come with too-good-to-be-true features. Have you recently received offers for business loans which carry extremely low interest rates, lax application or eligibility requirements, incredibly high loanable amounts, and very flexible payment terms and options? If you have, did you immediately apply for them? We hope you didn’t. After all, most of them cannot live up to their promises. In fact, they might only use such suspiciously-good features to entice and eventually rip off prospective business loan applicants.

So, instead of getting swayed by their offers, we advise you to conduct thorough research on the prevailing rates and terms, found in business financing deals available in the market. By doing so, soon you will be armed with accurate information that can serve as your in choosing which credit program to sign up for and which offers to turn down.



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About Irish Taylor Innovator   Business Consultant

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Joined APSense since, March 26th, 2013, From Las Vegas, Nevada, United States.

Created on Dec 31st 1969 18:00. Viewed 0 times.

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