Last month, The House of Representatives’ Select Subcommittee on the Coronavirus Crisis announced the launch of an investigation into the role of the fintech industry in PPP fraud. Chairman of the Select Subcommittee on the Coronavirus Crisis, James E. Clyburn sent letters to four fintech firms and partner banks (Kabbage, Inc, BlueVine, Cross River Bank, and Celtic Bank) seeking “documents and information related to their handling of Paycheck Protection Program (PPP) loans.” These companies and partner banks have reportedly handled 75% of the approved PPP loans that have been connected to fraud by Department of Justice (DOJ), despite facilitating just 15% of PPP loans overall.
The news serves as a valuable reminder of the importance of using a transparent and credible lender for small business funding. Surprisingly, the small- to medium-sized business lending space is still unregulated and you may encounter alternative funding companies charging exorbitant interest rates and 3rd party fees, using misleading contracts, or even employing bait-and-switch tactics. So how can you be certain that the lender you choose is not only trustworthy, but also has your business’s best interests at heart?
Here are some essential traits to look for in a reputable small business lender:
- A Solid Reputation and Track Record
Before doing business with a lender, check their online reviews and BBB ratings. Do your research to make sure the company has a solid reputation. Read testimonials and don’t be afraid to ask for references.
- They Offer You Various Options
You should be presented with several different options and funding products. This will allow you to evaluate what the best choice is for your business’s specific needs and make an informed decision.
The funding amount, repayment details, loan terms, fees, rates, and timeframe should all be clearly laid out and outlined for you in plain language. If something seems obscure, ask questions, and make sure you feel comfortable.
You should never feel like you are settling for a cookie cutter funding solution. Choose a lender who is willing to work with you and who will create a customized financing solution that suits your business.
- They Consider Your Business’s Long-Term Goals
Your lender should take your company’s long-term goals into consideration. A reputable company will go the extra mile and continuously reevaluate your needs to match your growing business with the right products and/or services.
What You Get with CapFront
We launched CapFront to protect entrepreneurs from predatory lending practices in an almost completely unregulated market. Our focus is on complete transparency with our clients, and our dedicated relationship managers are bona fide experts in business funding, so you can count on us to educate you on how to evaluate your options as well as how to take the next step towards securing a comprehensive suite of lower-cost options over time.
Unlike many other lenders, with CapFront you get:
- Relationship Building
- Client Education
- Product Graduation
- Full Transparency
- Sustainable Financing.
Need Quick Funding?
Contact us today at 844-466-6394 or here and one of our dedicated relationship managers will discuss your needs in order to determine the best product for your business. We are here to help, every step of the way.