Don't Let a Loan Scam Ruin Your Business Dreams

More than 54% of all sales in the United States in 2014 were made to small businesses, according to the Small Business Administration. It's apparent from that statistic that the U.S. economy relies in no small part on the success of small businesses in this country.

Yet, many small businesses fall prey to those wanting to take advantage of the ignorance or desperation of small business owner. Don't let a loan scam ruin your small business dreams.

As the following article shows, here's how to detect & avoid personal loan scams….

High Interest Loans Not Based on Your Credit History

Don't do business with lenders who are willing to offer you money at high interest rates that are not based on your credit history.

If you have worked hard for your high credit score, you deserve to get better interest rates. Don't be lured by lenders who tempt you with fast money and "no background check."

These lenders are marketing to people with poor to no credit histories that can't get money anywhere else. That's not you.

Loans Secured With Future Receipts

This is a common loan scam that offers business owners "no credit checks" loans that are based on past sales and secured with future receipts.

If you want to guarantee that your business will at least flounder for the next few foreseeable years and possibly fail entirely due to lost revenue in trying to pay back a loan of this type, by all means, sign on the dotted line.

However, you'd be better off trying to raise money on a crowd funding site than turning over future revenue to a scam of this nature.

Loans with Exorbitant Application Fees

Loan application fees are non-existent in the traditional banking world for a reason. They are unnecessary, and signal a scam.

No legitimate loan company will ask you to pay a fee for the privilege of being turned down in your loan application, which is what these scam operations will do to you.

If you're desperate for a loan, and fearful that no bank will take you on, seek out a collateral loan instead where you can offer title on goods to your lender in the unlikely event that you are unable to pay back the loan.

Loans Based on past Credit History and Job Stability

If you come across a lender who wants to access your credit score and who calls to verify your employment, you've probably found a reputable lender.

Loans are supposed to be based on verifiable information such as past repayment history and income stability.

A lender like this will offer you a favorable rate based on your personal history and credit risk.

Loans from Name Brand Lenders

If your business loan is offered by a company whose name you recognize, versus a company you've never heard of, it's likely a legitimate company.

Financial companies that offer loans to small businesses usually advertise heavily on media such as television. Dodgy financial companies that are registered in foreign countries with names you've never heard of don't deserve your attention or business.

Be careful whom you borrow money from.

Make sure whomever you do business with is upfront and honest by referring to this article.