Business Loan Scams: Our Guide to Avoiding Them
When you’re on a limited budget but want to establish your business, business loans are the way to go. However, opportunists know that business loans have a growing demand. They have developed schemes to trick unsuspecting people into giving them their money with the goal of not fulfilling their promises.
Take note that not all scammers are Australian-based. Many of them are from countries that you least expect. To help you avoid getting scammed, read this quick guide to enrich your knowledge of the best practices to stay away from intelligent robbers:
How to Tell if a Business Loan Provider Is a Fraud
There are sure red flags that you need to watch out for that help determine if your loan provider is a lying fiend. One red flag should be enough to make you cautious, but the presence of two or more is a clear indication that they’re nothing but a scam.
The biggest red flag is if they ask for money upfront. Legally speaking, the loaner has no obligation to pay the loan provider with any amount of money upfront. With that said, if your loan provider says they need it for whatever reasons—these could range from processing fees, the cost for checking your credit levels, or administration fees—turn away immediately.
The next thing you should watch out for is the lack of any credible information. A physical address of the business’s main office should be present in case you face some problems in the future. If they fail to provide that, that’s a clear warning of their intentions.
Third, legit business loan providers don’t ask to help you improve your credit score. Most money lenders look at your business proposal and not your credit score when you’re applying for a business loan. Fraudulent money lenders use this to appeal to people with low credit scores who have no idea how business loans work.
Fraudulent Business Loan Providers Practice Digital Marketing
The most disturbing thing about modern scammers is that they use advanced technology to aid them in their schemes. With tech-savvy criminals, they can easily steal your money once they get a hold of your information.
Some scammers hijack legitimate websites to display their ads. Be careful about too-good-to-be-true statements like “guaranteed approval” because unrealistic statements are excellent indicators of a scam.
Some scammers also make an effort to create a fake website. Then, they can trick people into thinking that they are a legitimate business because they have an established website. It is best to remember that not all professional-looking sites are legal, so scrutinize every site like it’s a scam at first.
Falling for a scam is not the end of the world. With that said, even if you did all the mentioned advice above, you can still become victim to the smooth-talking of scammers. When this happens, report the incident to ASIC immediately. Then, file an official police report. In doing so, you help authorities put those criminals behind bars so that they can’t harm others anymore.
Getting a loan doesn’t have to be challenging for you anymore. We can help you find the best business loans in Australia. Come get started with us today.