Business Loan Scams And How You Can Avoid Them
Raising capital for your startup or small business may seem like quite a task. If you’re new to the scene, the financial jargon alone is sure to leave you baffled. In such a situation, falling prey to fraudulent lenders and business loan scams is easier than you think. Here are quick and simple hacks that will ensure you opt for only a secured business loan.
As an entrepreneur, are you wondering how to get a loan to start a small business? You are not alone. However as you go about your search, you are vulnerable to various malpractices that are a part of this trade.
To avoid falling victim to business loan scams keep the following tips in mind:
Beware Of Giving Out Personal Information
Most often, scammers talk you into giving them various personal details such as your address, bank account details, credit card number and your government ID details that can help them easily gain access not only to your bank account, but also to your identity. Make sure you receive legitimate paperwork for the loan before providing any such information.
Also Read : Things To Know Before Applying For Business Loan
Do Your Research
As an entrepreneur looking for a business start up loan, make sure you do not skip out on your own research. Before applying for a loan make sure the lender or bank or financial institution you are considering has a legitimate physical address. Do your research on the company’s background, its parent company and on how trustworthy the company is. Read reviews or testimonials on social media or talk to a friend or peer who has taken a loan earlier as they will be able to guide you through the process better than anything else.
If It’s Too Good To Be True, It’s Not True
A lot of times, schemes offered by scammers are usually too good to be true. Promising low rate of interest or instant approvals are usually common ways to lure you to apply for the loan. Before granting a loan, companies usually make sure that you have high credit worthiness and no history of bankruptcy. If a lender is willing to give you a loan regardless on your financial health, it is most probably a scam. While your weak financial health will make you feel like these schemes are your last resort, don’t jump to conclusions. There are various options available that are sure to provide you with the help you need.
Don’t Skip The Fine Print
We’re all guilty of skipping some of the text before signing important documents. Most often than not, information that the company doesn’t want to lay emphasis on is written in fine print. Make sure to read the entire document thoroughly and most importantly understand all the clauses before jumping on board. As the document is legal, signing without reading and understanding may land you into deep trouble. Thus, regardless of where you’re sanctioning a loan from, always make sure to read every inch of the document.
A Strict ‘NO’ To Upfront Fees
While applying for a small business development loan, paying an upfront fee before your loan is approved is a major risk. This is an almost definite red flag in the process of applying for a loan. Dupes may ask for fees as security, insurance or as an application charge. Make sure to scan your options and do your background research carefully before making this payment. Companies usually only deduct a part of the payment after the approval of the loan.
Now that you know the worst that can happen, be optimistic and begin your search with a clear mind and fresh eyes. Whether it is a loan to start your business or a working capital demand loan, don’t forget to research business loan Bajaj Finance options. Without needing collateral or guarantors, this business loan by Bajaj Finserv can be paid back over an agreed tenure with a minimum rate of interest.