There are some vendor finance scams out there have become a nightmare of the people who want to choose vendor finance as a way to start their own businesses. In order to make sure you get the right opportunities from vendor finance, you need to know what to look for with scams.
You may say that there is no way you would ever be taken advantage of like that. Yet you need to realize these scam artists are very good at what they do. They have carefully studied the methods of legitimate vendor finance programs. They likely have even been to many of those presentations. Every move the make is very calculated so you are drawn in. They want to make it as realistic for you as they can. Then when you make your down payment they will be able to run with it and leave you with nothing in return.
Another common scam is that they will include fees and clauses in the contract that will result in them getting a huge chunk of your profits. While you may not be agreeing to this upfront, if you sign the contract then you are bound by the terms of it. No court of law is going to accept the excuse that you didn’t read it all or that you didn’t understand it.
You need to know all you can about the vendor finance company before you work with them. How long have they been in business? What are their goals and their methods used for increasing their business? What is in it for them to help you with the funding you need for your own business? Take the time to read independent reviews online from other people that have worked with them. You also need to check with the Better Business Bureau to find out if any complaints have been logged.
You should reconsider whether you would work with them if you can’t find any information on them at all. It could mean they continue to start up under a new business name, scam people, and then change the name to stay ahead of the game. With a reputable vendor finance program you should be able to come across plenty of good information about it.
Read all of the information careful before you sign on the dotted line. The paperwork for vendor financing can be lengthy and it can also be boring. Yet you don’t want to commit yourself to anything without fully understanding what you will be required to do. Otherwise you set yourself up to be taken advantage of. Financially, it could destroy any chance you have of a successful business.
It may be a good idea to have an attorney look over the documents for you. If you aren’t sure of what some of the terms and conditions mean, then ask the attorney explained to you. This extra precaution on your behalf can prevent you from getting involved with the wrong vendor finance company. If you feel that the company is pressuring you to hurry up and sign it then take that as a red flag that it could be a scam.
Anyone can be taken for a ride from a vendor finance scam so doesn’t let you become a victim. By knowing what to look for and common tactics they use you can be better guarded against it. Should you become the victim of such fraud make sure you report it to local law enforcement. Too many people are embarrassed to do so. Yet that only gives these con artists more power to continue doing it to other people.
