ASHI and MEDIC First Aid Blog

July 23, 2019

Protect Your Training Center from Small business Loan Scams

Having your own emergency care training business sometimes means taking on a small business loan. Whether you are just starting your Training Center or you’re expanding your existing one, do your research carefully before choosing a loan to avoid common small business loan scams. This is especially the case if you are considering working with an online lender.

The American Management Association offers these red flags to watch for and best practices to follow:

  • Be especially wary of unsolicited phone calls, e-mails or letters from prospective lenders making claims that sound too good to be true.

  • If a prospective lender guarantees a loan without checking your credit or reviewing your business plan, proceed with caution.

  • Beware of lenders who cater to applicants with bad credit, or who pressure you to make a decision on the spot.

  • Asking for fees up front: Never send money before you receive a product or service and remember that no transaction is safe unless you know for sure that you are dealing with a legitimate firm.

  • Before you do business with any prospective lender, check with the Better Business Bureau or state attorney general's office to see if any complaints have been filed against them.

  • Request the lender’s financial statements, specifically assets and capital.

  • Take advantage of local resources like the Small Business Development Corporation (SBDC), small business clubs, networking and minority business groups for recommendations of trustworthy lenders.

In their article, “8 Common Business Loan Scams—and How to Spot, Avoid, and Report Them,” Fundera, Inc. adds a few more lender warning signs, such as:

  • Non-traditional advertising

  • Lack of a physical address

  • Generic email addresses

Once you have obtained your loan, your vigilance must continue. Fundera explains that some scams are deployed after you’ve secured your financing, such as:

Debt relief scams: You should be on high alert if a lender promises to “get you out of debt.”...The best thing to do if you’re struggling with loan payments is to contact your lender directly.

Debt collection scams: If you take out a small business loan but are unable to pay the loan back, the lender will contact you...The main red flag [here] is if the caller uses unusually harsh or high-pressure tactics to try to get you to pay the outstanding debt. Legitimate lenders will usually try to work out a payment plan with you if you can’t afford a loan.

If you suspect you’re a victim of a business loan scam:

  • Report the scam to the Consumer Financial Protection Bureau (CFPB). 

  • File a complaint with your local police. They might not be able to do much to help if the scammer used untraceable methods, but when there’s a financial dispute, it’s helpful to have a police report on file.

  • Report identity theft to the Federal Trade Commission (FTC).

  • Contact the credit bureaus and place a fraud alert on your file. This will alert prospective creditors and lenders that someone might be trying to use your identity to apply for credit. (Note: an initial credit alert expires in 90 days.)

Interested in more tips for your training business? Subscribe to our ASHI and MEDIC First Aid newsletter! In addition to news on new HSI products, resources, and special promotions, the newsletter features suggestions and best practices for everything from marketing your business to improving your teaching skills to instructions on how to get the most from your Otis TC portal dashboard. Click the button below to subscribe.

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