Are you looking for a small business loan and searching for a legitimate lender? Want to avoid predatory lenders? Here are some red flags to look out for.
Predatory lenders include any lending practice whose terms are unfair or outright abusive. They can use deceptive tactics, coercion, and exploitation to prey on small business owners.
At First Union Lending, we’re here to provide legitimate small business financing solutions and help you make well-informed decisions that best suit your business needs.
So what are some red flags to look out for?
No physical address
This is a red flag, even if they are an online lender. A P.O box mailing address is also very suspicious. Many frauds routinely set up P.O boxes and have them forwarded to untraceable locations.
Lack of internet presence
A reputable lender will have a secured, up-to-date website with plenty of information for borrowers. If you’re having trouble finding more information or a lack of reviews, they might not be a credible operation.
Guaranteed acceptance
It is not realistic for a credible lender to offer “guaranteed acceptance to anyone that fills out an application. This is due to borrowers that pose too much of a risk. Legitimate lenders need to verify that their borrowers can pay back their loans.
Requesting Personal Information without proper documentation
Suppose a company asks you for sensitive information over the phone or email without providing you with the legitimate paperwork to support its use. In that case, you may be dealing with a scammer. Keep private information like your Social Insurance Number and bank account details protected.
Upfront fees
Be aware of any attempts by lenders to get you to pay just to look for a loan. It’s normal to pay an origination fee or a processing fee after your loan application is accepted, not before.
Dodging Your questions
If a lender avoids answering your questions about the details of a loan, run. A legit lender will take the time to make sure you understand the details of the loan.
Rushing you through the process
Shady lenders will often push you to sign paperwork without reading it or tell you to ignore all of the fine print. A reputable lender will be sure to give you enough time to process the terms and conditions before you sign.
So those are just some red flags to look for in a lender.
Remember to research your lender before you trust them and to read every word before you sign on the dotted line.
Work With a Trusted Lender Like First Union Lending
If you’re looking for a legitimate and trusted lender, we can help. First Union Lending offers numerous financing programs designed with small businesses in mind. Our business loans are fast and flexible, with financing options ranging from $5,000 to $2 million. Call today to learn more about our various financing solutions to help your business grow and become successful.