We recently posted about The Lure of Fast Business Loans and the amazing growth of business loan brokers – with their non-stop emails, phone calls, mailers, etc. Given that you’re likely being bombarded with “Quick Money” funding offers daily, the question you should be asking yourself is:
Who can I trust when I need funding and the banks can’t/won’t help?
- A Direct, Licensed Lender. It’s a fact that there are a growing number of direct funding organizations, however comparatively, there are literally thousands more loan brokers. To be clear, if you are talking with someone underwriting the deal, providing the money, and collecting the payments – they’re a real lender. Real lenders have websites that clearly show the owners of the firm and talk about their business backgrounds. If you go to the website of your contact and that site is faceless, nameless, and lenders-license-less, they’re not a lender. They broker loans for maximum commissions and they have no responsibility for whether you can or will make the payments.
- An Experienced Business Professional. If the only concern you have is who can get you the money you need the quickest, then any port in a storm will do. If you want someone to help you navigate the options (rates, terms, payment types, etc.) and help you make the best financing decision for your unique business and needs, then trust someone who has the demonstrated experience of successfully building and growing small businesses themselves.
- A True and Passionate Funding Advisor. This is someone who takes the time to discuss your business with you, to understand what you’re trying to achieve, to share which options may or may not be worth pursuing (and why!). A Funding Advisor actually advises – he/she doesn’t just ask you for bank statements and then call you non-stop to take the working capital offer that makes them the largest commission. A real Funding Advisor helps you, doesn’t pressure you.
It is so critical for you, as the small business owner, to thoroughly consider exactly how you will use the funding, and to recognize what you can realistically afford. The cost of “Quick Money” can be steep, and broker commissions add directly to your cost of funds. This can be a complicated and confusing process for many small business owners who are busy running their businesses – this is why a trusted business advisor is valuable.
Stay tuned for our next post in the series where we’ll talk about these high costs and the increasing calls for legislation in the alternative financing space!
For more information, we would LOVE to hear from you!
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