Know The Finance Industry
When you apply for any type of loan, it can be hard to tell if the business offering project funding is a scam. It is important to work with lenders who have a history of funding projects. Whilst some funding coporations may not list whom their clients are for confidentiality reasons, there are ways you can check to see if they can be trusted with your money.
- How well known are they?
- Are they licensed/registered with a financial authority?
- Listed on BBB/trusted websites
- Main lenders or independent brokerage
Funder ScamsTaking on board the bullet points above, other points you can use to protect yourself when someone says they are a financial provider is:
- Are they listed on a complaints/scam website?
- What are their terms and conditions?
- Where are they operating from? Are they incorporated there?
- Where did you see their business advertised? In a search engine or forum?
- What's the fee status and APR
- Are they exposed on social media/ networking platforms or hidden entity?
- Are they knowledgable in finance?
Intermediary Businesses In FinanceThe most common way is for individuals setting themselves up as intermediary businesses:
- Do they exist on LinkedIn with Personal recommendations?
- Are they a well known company?
- Does the business have a professional website?
- Are they a registered business entity?
- Do they use a business email?
Information People Provide Online
If you are applying for finance, one thing to question is the use of business or personal emails. Would you rather correspond to someone using:
Check where the email is being sent from vs where they say they are located? We often catch out service providers who's website says their office is based in one country yet their emails derive from another country. This can often be a red flag and a sign that the so called 'company' is just posing as a legitimate company.
One could argue whether there is a reason to conduct financial transactions using a personal email address for business reasons?
If they have conducted business in finance before, why haven't they got a website? (Watch out for the "free self build websites so commonly used such as WIX, Weebly or similar) Is the address on the website pointing to a home address or business? Are the intermediaries/funders exposed on the internet? eg do they seem established and open? Are they forthcoming with information? Do they have a willingness to help you or do they seem only to want money from you?
Knowledge In The Field
Do they understand the workings behind funding a project? Knowledge of finance is integral to the funding business. If the person is soliciting financial services to you, how much do they know about funding projects?
If you are applying through an intermediary firm, one important tip we want you to know is that they should not handle client money! They should only receive money upon successful placement.If the intermediary is asking for a fee for their service, stay away!