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Schemers Multiply: How to Avoid Being Taken

Schemers Multiply: How to Avoid Being Taken

A recent Wall Street Journal article by Emily Maltby titled, “Crooked Loan Agents Take Advantage,” discussed the growing unethical practices of loan brokers.  With small business credit still scarce, those trying to take advantage of  desperation have found another niche.  Fraudulent agents wildly distort the financial health of borrowers’ to lenders to get the deal done and collect their — usually exhorbitant — fees.

This practice is detrimental to the borrowers, who overpay commissions on a loan which they inevitably can’t repay; to the lender as the owner of a note which is in default; and to the reputable loan agents who actually do provide valuable services to both.

 The SBA is cracking down and hopefully, other lenders will follow suit. In the meantime, avoid being taken advantage of by doing your homework.  If you are a business looking for cash, it is more important than ever to work with a reputable and experienced capital raising advisory firm to provide the connection to lenders. Make sure to check all references thoroughly and research public and BBB databases for red flags in order to make certain you choose the right partner in lining up liquidity.

To read complete article by Emily Maltby: