Borrower Beware: if it sounds too good to be true, maybe it is
Has your Business ever received a solicitation in the mail saying you are “Pre-Approved” for a loan up to $100,000 or up to $250,000?
What does Pre-Approved mean? Either you ARE Approved or you are NOT. There is no in between.
If you are Pre-approved, why do you have to fill out an application?
If you are Pre –Approved why do they need to pull your credit report?
You can have the money in ONE DAY.
Rates as low as 3.49%
Unsecured and no collateral needed.
If you have tried to obtain bank financing in the past, you know that getting financing for your business is not that easy and not that quick and not that cheap.
Banks also require collateral. So why would a Total Stranger who knows nothing about you or your business offer you such a sweet deal?
Have you ever heard of Bait and Switch tactics in Business? That is the best way to describe their marketing and sales practices.
The reality is, IF you do qualify for any type of these offers from these companies you will be subject to the following terms and conditions:
- Effective APR rates in excess of 50% per annum sometimes more than 100% APR
- You pay unusually Large fees upfront to originate the Loan.
- You give the company complete Power of Attorney to act on your behalf.
- They file a Blanket Lien on all your Assets of the Company until the loan is paid off. That also includes the Cash in all your Bank Accounts.
- They ACH Auto Debit the payment DAILY from your checking account.
- The term is short, Usually 18 months or less. Usually Less than a year.
- These Lenders get paid daily meaning they are paid before your Employees (Weekly), before your suppliers (Monthly), and before your Secured Creditors (Monthly)
These offers are coming in the mail, over the fax, through e-mail. It seems to be the newest wave of financing for small businesses out there who are either new in business, do not qualify for conventional financing or are so strapped for quick easy financing, that they only ask the question of How much and When. They do not read the fine print and realize what kind of transaction they are getting into.
If you want to prevent a lending problem that you cannot afford to pay back and avoid lawsuits instead of trying to cure the problem after it is already done, call AL Advisory Group and get the straight truth to all of these deceptive marketing promises that usually don’t deliver happiness or pleasure to your business.