You only need to contact one of the three major credit bureaus (Equifax, Experian, or TransUnion), and they’ll notify the other two. One of the most common warning signs is a request for upfront payment. Legitimate lenders typically don’t ask for money before you receive your loan funds.
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By now, you should have some idea of what to watch out for in a potential loan scam, but let’s go over the red flags again so you can take steps to protect yourself. When you’re desperate for a loan, it can be difficult to pass up what may feel like your only opportunity to get one. But if you’re feeling uncomfortable, it may be because you know something isn’t right. Take time to do some research, especially if you risk losing money in the transaction. Trustpilot is another option for checking online reviews, but smaller companies are less likely to have reviews there. If the only address provided is a P.O Box, you may need to do additional research to verify the company is legitimate.
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Seek legal advice if you’ve lost a significant amount of money. A lawyer specializing in financial fraud may be able to help you explore options for recovery. Keep copies of all correspondence, notes from phone calls, and any other relevant information.
Step-by-Step Guide to Verify Loan Companies
And while a business may hire a professional grant writer to apply for specific grants, you do not need to pay to apply for government grants. Business owners often look for small business grants, which unlike a loan, offer money that does not have to be repaid. Scammers may capitalize on the appeal of “free money” and claim you’ve been awarded a grant, often for thousands of dollars. They say you need to pay a small fee to receive it. In reality, there’s no grant, and you lose your money. Laura was great, very professional, and supportive.
Then, to protect yourself, you should also contact credit bureaus. Ask each credit bureau (Equifax, Experian, and TransUnion) to freeze your credit so no one can take out new credit without your knowledge. You should also get a copy of your credit report (again, get a credit report from each bureau) to check for suspicious activity. And in that case, you’re ready to start your loan application―but don’t let your guard down just yet. While you’re on a loan company’s website, go ahead and look for contact information―especially a physical address. One of the first ways you can weed out loan scammers is by looking at a lender’s website (and other web presence).
- Evaluate what you’ll use it for and how it will help your business grow or solve a specific problem.
- You can start with the lender’s Better Business Bureau profile.
- If they do charge fees, they’re typically deducted from your loan amount after approval.
- That way, you’ll know you’re dealing with a legitimate lender and not a fraudster.
- We increased the Trust Score of lexafunding.com as a result as most scammers never renew their domain name once the scam is public knowledge.
- Many reputable lenders will check your credit as part of the loan application process.
Scammers capitalize on these dreams or desperation of entrepreneurs, and steal money that could be invested into the business.
While this isn’t necessarily a scam, it’s crucial to ensure you’re dealing with a legitimate lender. Reputable companies use secure third-party services like MX, Plaid, Finicity for this purpose. These services help them view account information but not withdraw funds from the account.
We’ve also found that Trustpilot often has plenty of lender reviews. In fact, many of our favorite lenders have thousands of borrower reviews on Trustpilot. Some newer lenders may not have that many reviews―but unless you want to be a guinea pig, we recommend sticking to a lender that has at least a few dozen reviews. Your accounting professional can help you evaluate your business cash flow and financial situation. First, contact your local law enforcement immediately. File a police report with as much detail as possible about the scam and the scammers.
Lawrence Sidoti and Casey Ignizio have always worked with me and given me the flexibility needed when needed and have lexa funding reviews always made me feel like a valued client. I have done business with them for about 4 yrs now and I will continue to work with them. They are very supportive of my small business as a medical provider.