The more folks we speak to about Disaster Financing, both in online forums and in our free phone consultations, the more HORROR STORIES we’re hearing about financing “professionals” who purport to do what we do with assisting Small Businesses with SBA Disaster loans.

There’s the “guy” who wanted 30% of the proceeds of a PPP loan. (ILLEGAL)

There’s the company that wanted to set up the business with a usurious, disgusting, despicable, practically-criminal Merchant Cash Advance (MCA) loan just so the client could pay the company’s upfront processing fee for the SBA loan.

There’s the company that took monies for the EIDL application, inputted incorrect information AND filed multiple applications for ONE company under different iterations (LLC, Sole Prop).

Same thing with some YouTubers who seek to build their audiences with “bait click” junk where they claim to have knowledge of the exact workings of the Second Stimulus Legislation. We saw that same garbage back in April before the CARES Act passed.

Please, please, please, BE CAREFUL. Here are a few considerations to help you in your decision making when it comes to exploring disaster financing options:

• Check their online reputation. It’s so easy and free to read reviews! Make the time.
• Read their website. If it looks like a “template” and looks like the 76,000 other financing company websites out there, then it may not be a company with long standing professional or ethical standards. They’ve had 11 months to build a quality website.
• Beware of bold proclamations. Unless you can see with your own eyes that a professional or “expert” has documented experience successfully processing SBA Disaster Loans, then you must listen with some skepticism. HINT: “bait click” titles with their YouTube videos or BLOGs are dead giveaways.
• You shouldn’t have to borrow money to pay an upfront fee to hire a professional. Ethical professionals will work with you to make payment arrangements. Why? Because they’re confident in the results they can deliver.
• A note about fees. For EIDL Loans, SBA allows a professional to charge up to $2500. And, they can charge more than that by requesting approval from SBA and demonstrating that the value of their services are commensurate with the fee they charged. You can find this language online in SBA Form 159D.
• Read their Consulting agreements. The language should be “plain English” and should describe EXACTLY the nature of their services and responsibilities. The agreement should clearly state the fees being charged. The agreement cannot GUARANTEE a result and the compensation cannot be dependent upon a loan approval. SBA requires this language.
• Beware any financing professional who defends the MCA program. These loans lead to HORRIBLE HORROR STORIES for business owners. The terms are onerous, expensive, and the Lender gets paid before your business sees a penny of your income. WHAT? Yeah, that’s why with all these sharks circling in the waters, you must be extra careful to protect your business.

There are other financing products out there…difficult to obtain, yes…but there are alternatives to the MCA loans. Anyone defending these products “to the death” is someone to avoid doing business with, period. (Extra punctuation language presented to punctuate the point!)

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