Red Flags When Applying for Accounts Receivable Financing
You’ve worked hard to get where you are with your small business. When you need financing to continue growing your company, make sure that you don’t see any of these red flags with your potential financing source.
Non-Transparent Fees and Terms
When applying for alternative financing, always make sure that the terms, conditions, and fees are laid out plainly to you before signing a contract. If an alternative financing company is reluctant to share all of the fees and conditions or pushes you to agree to financing without sharing all of the terms, this is a red flag. Not only should you be aware of all the fees upfront, but the financer should be open, transparent, and willing to go through the terms with you until you understand your contract fully.
Not Enough Information About the Lender
Lenders should be easily accessible. If you’re looking for alternative financing and the application process is extremely simple, but contacting them is not, this is a red flag. All lenders should have a phone number listed, not just an email, to get in touch with them. If you have questions about the company, you should be able to speak to someone knowledgeable from the company and receive clear answers. If the lender won’t give you a number to contact them or skirts around your questions this is a red flag and you may need to look elsewhere for financing.
Bad Reviews from Previous Clients
While most companies will have the odd poor review or two, it shouldn’t be the norm. The company should have a reputation for transparency, openness, and great customer service. Financing is crucial to the growth of your company, so if the financer is receiving poor reviews regularly or has an overall low rating, it’s probably a red flag.
Fees or Terms Change Suddenly
If you’re about to close on financing with a lender and the fees or terms suddenly change from what was previously discussed, this is a definite red flag. No lender should ever trick or trap you into a contract by making previously undisclosed, last minute changes to your contract that would adversely impact your company.
They Overly Pressure You
Sales strategy is a part of any good business, but it’s important when working with a potential lender that their desire to sell is overwhelming. They should never pressure you to take out a risky loan or to act too quickly. When purchasing a home, most people take time to choose the right house and shop around for the right price. The same should be done when searching for a small business loan. For such a big decision, undue pressure should never be exerted by the lender to make you sign a contract before you are 100% ready to do so. If you feel that substantial pressure is being applied for you to complete the proposed loan arrangement, this is a red flag and perhaps this lender is not acting in your company’s best interests.
Apply for Financing with Alternative Lenders Allied Financial of Delaware Valley
If you’re looking for an alternative lender to finance your small business and have been denied by a traditional bank, contact the financing professionals at Allied Financial of Delaware Valley. When you finance with us you can expect the following benefits:
- You will have a “face to face” meeting with of our knowledgeable representatives early in the process.
- You will receipt a timely, customized Expression of Interest letter outlining the specific terms of the proposed financing.
- Your loan request will be processed quickly and efficiently and you will be kept fully informed at all times.
- Your borrowing program will be structured to meet your company’s financing requirements.
- Your loan program with Allied will help your company to grow and prosper.
Talk to us today to learn more about your financing options at 856-481-4790.