As we approach Halloween, we are reminded of the horrors and fears we all have....scared of the dark, ghosts, evil spirits, and chainsaw wielding crazies. But in all areas of life there are horrors, and business financing is no different.
What do borrowers need to beware of when obtaining financing?
1. Who are you talking with?
What is nice about traditional banks is that the majority of the time you meet, get to know, and interact with a real life banker. They want to get to know you. They want to learn about your business. Borrowers need to do the same with the company or person that is promising them business financing. Does that company or person on the phone, email or text want to know about you? Do they ask questions about your business? Do they care about your success? Or are they promising low rates and quick money? As a borrower, look up the company you are supposedly talking with; check out their website and linkedin profiles. Is the business nameless and faceless? If so, why are they hiding in the shadows...is it to scare you like a character in a haunted house?
2. Is the promise of low rates to good to be true?
How many times do we hear, don't worry, it is safe to come in while standing in line at a scary theme park or horror show only to know we are going to be scared out of our minds! We are told constantly that borrowers are promised 0% loans or 3% loans. Or they are promised to be in Tier 1 or Prime tiers if they take this other loan and pay it back...then you will get that super low rate, long term option. How scary!! If you are being promised rates that banks advertise are those promises coming from an actual bank? Non-bank lending is just that...non bank. That means rates will be higher than the traditional bank sources. Don't be fooled!
3. Bait and switch.
Like the wicked witch who offers that shiny red apple only to have it be full of poison, so too are the outlandish offers and promises by made by online companies promising unreasonable business financing solutions. If a business qualifies for a SBA loan, then they should not have to take a short term, higher price loan in order to obtain the SBA loan. Likewise, if a business owner's personal credit has come challenges, taking a merchant cash advance most likely will not improve the credit to a level that they will be able to qualify for a traditional bank loan. Beware of that shiny apple only to be given the rotten core hiding in the other hand!
LendSpark believes that long term customer success is vital to our success. We have linkedin pages with personal photos. Our goal is to get to know our customers and in turn, they get to know us. And though we strive to find the best and lowest cost solution for your business financing needs, if the only solutions are hard to hear, we will tell you. The last thing you need as a business owner is year round Halloween scares when it comes to obtaining business financing!