Scams on business loans. Learn to detect and avoid them

The Internet and new technologies have made thousands of tedious and bureaucratic processes become much more agile, efficient and secure, including the management of personal and business loans.

Today, there are many Fintech specialized in helping you get a loan, such as Cilitum, that helps you compare among dozens of alternatives so that you can choose the SME loan that best suits your needs. However, not everything is rosy and just as it is now easier for small businesses to become more competitive acquiring quality financial products, the phenomenon of scams in this area has also grown alarmingly.

According to a survey carried out by the BBB, 67% of SMEs feel that today there is a greater risk of being scammed than three years ago. In 2016 alone, credit-related scams amounted to 50 billion in monetary losses.

One of the biggest problems is that scammers are often masked behind false identities or pretending to be part of respected financial companies and banks. The fraudsters take advantage of the need of entrepreneurs and entrepreneurs to obtain fast and economical financing to steal money, personal data and sensitive information from a business pretending to be legitimate credit brokers.


Luckily, there are many ways to detect these frauds and avoid them. Scammers can contact you in many ways and with different speeches, but they all have in common some factors that will help you determine that they are not reliable sources. We present the 6 most frequent types of credit scams for companies.


1. Management fees in advance

money problem

These types of scams promise low interest loans or even 0%, and ensure that the applicant can acquire them even if they do not have a good credit history. The only detail is that they ask for an application fee in advance. The name given to this “fee” can be very diverse: advance payment for management, security investment, broker fees, etc. Whatever label you put on it, the point is the same: someone asks you to deposit money to an account before your credit is authorized.

Some legitimate credit brokers do ask for upfront fees, also banks, for a process such as a history and opening review, but they will never promise that such payment ensures the authorization of a loan, much less when there is no solid credit rating.


2. “Loans” between individuals


They are very similar to the previous ones, but instead of offering you a loan from a bank or a lender, the scam revolves around the credit model between individuals, which makes promises associated with eligibility, immediacy and low interest a little more credible. . There are many platforms on the Internet that mediate loans between individuals in a completely legal and transparent way, but scams tend to come through publications and messaging in social networks and forums.


3. Enterprise or government fund fraud


They usually start with an email message in which you are “notified” that you have been selected to receive an entrepreneurial fund for your business, from the government or from an institution that for any reason is interested in boosting your business.

Same dynamic: to “secure” your fund you have to make an advance payment for management. In other cases, all you are asked to do is fill out a form with sensitive information that can then be used for identity theft or account theft.

The reality is that no institution that offers this type of benefits actively seeks companies to give them to, but instead issues the relevant calls and chooses the businesses benefited from a selection process among the applicants.


4. Fraud of “credit repairers”

credit repairers

These scams are aimed at people who need to improve or create a credit history in a short time and promise to achieve it in unlikely times. There are some credit repair companies that operate legitimately, but there is not much they can do that you cannot do yourself, apart from concentrating your overdue debts into one to unify the interest rate.

No company can repair your credit history, eliminate debts or delete information in exchange for money. It’s a lie.


5. Ghost Investors


Overnight, an “investor” appears interested in capitalizing on your company because your business model has caught your attention. Sometimes they ask you for the classic management or intermediation advances, but more commonly they try to apply them by giving them personal data and information that should be confidential.


6. Brokers scammers

Brokers scammers

There are an impressive number of individuals who present themselves as expert brokers in business credit and in reality they are only scammers who charge the first management fee and run away without you ever hearing from them again.


As you can see, unfortunately there are many scammers willing to take advantage of the need for entrepreneurs and entrepreneurs like you to finance their business. Never take unsolicited credit proposals seriously, and when you need to manage one, approach trusted platforms such as Cilitum, where we help you select your credit among dozens of legitimate financial institutions, in a completely transparent way and without charging you a penny.