Small businesses are often targeted by scammers who offer fake loans. Often fraudulent operators may seem legitimate initially, as they present official websites that feature fake reviews and testimonials from happy clients and sophisticated advertisements. As per https://www.forbes.com, “There is a constant barrage of advertisements for credit repair companies on radio, television, print media and the Internet that target people with bad credit. They imply or directly promise that they can “fix” your credit or significantly raise and improve credit score.” More often than not, these statements or solicitations are absolute lies or misrepresentations as to what precisely could and could not be done legally. The best way of avoiding being ripped off is to determine if a loan company is actually, a legitimate one.

Examine the Payment Requirements

You may ask your shortlisted loan company if you need to make any payments upfront. Suppose the loan company wants some fees upfront, you need to be alert and treat it as a red flag. Legitimate loan companies would simply be disclosing their fees in advance but would be deducting the fees once you get your loan amount. They would never demand any fees in advance. Do not get swayed by false promises such as your loan approval would be guaranteed if you make an upfront payment.

Consider Getting a Professional Review

You must seek the advice of a qualified lawyer for reviewing your loan contract or agreement so that he could detect any chances of a scam that you may have missed. You must refuse being rushed into a loan agreement. You must identify and understand their high-pressure endeavors and tactics to push you into signing a loan contract hurriedly. You must at once treat this sort of behavior as a red flag and know at once that you are dealing with a scammer. Legitimate loan companies would encourage you to get your loan agreement reviewed by your lawyer.

Examine the Legitimacy of the Lender with Better Business Bureau

You must browse meticulously through the BBB database. You must go to the local Better Business Bureau website and choose your loan company. You may search by the type of the lender and find information such as the email, website URL, telephone number. You may consider narrowing your search by incorporating the postal code or location of the lender. You may even use the search tool on the BBB database for locating any loan company which is an accredited member of the Better Business Bureau. This way, you could examine if your lender is a legit one or not. You may browse through reputed and legitimate sites such as https://www.libertylending.com/ for perfect lending solutions.

Examine Other Sources

You may get in touch with your state’s financial registration agency, attorney general, or even the banking oversight agency. Lenders and loan companies are needed by law to get themselves registered with these state agencies for doing business legally within a state.

Legal Factors to Consider While Taking Out a Loan

Your Precise Legal Structure & Its Impact

Your legal structure would be dictating the process you need to follow for obtaining a loan including how should the document be signed, who must authorize the transaction and the precise steps to be taken.  For instance, registered charities would be needed to obtain written financial advice, by the Charity Commission before seeking a secured loan. Trustees have to be sure about the fact that the loan would be used for activities that are compatible with the charity’s objectives and overall purpose. You must ensure that the loan terms are reasonable and that the charity is in a position to repay this loan.

Check All Your Governing Documents

Before taking out a loan, it is important for you to examine your governing documents to ensure that they authorize you with legal powers to take out a loan and even pledge assets id necessary as collateral or security. If you are not very clear on your authority, you may seek legal advice and guidance.

Buying Property or Land

If you are taking out a loan for buying a property or land, you must consider reading the ‘Charity Commission guidance’. Charities must ensure that:

• The property is just right for the specific requirements of the charity.
• The price seems to be reasonable and fair.
• It can afford such a purchase and that the loan has been obtained on fairly reasonable terms.
• You understand all legal implications and obligations associated with the purchase of such property or land like planning restrictions.

Scope for Personal Liability

Suppose you are actually, an unincorporated organization, your trustees may need to opt for joint or multiple personal liabilities for seeking the loan and make sure that the trustees agree to do that. You may consider modifying the specific legal structure. Some banks may even need personal guarantees from charity trustees.

Property Registration

You must examine the land registry meticulously if the property has been registered in your present name. Just in the case, the property has not yet been registered; this could lead to major delays in the event the property is being provided as the collateral for the loan. In the event this property is still not registered, you would be required to find the title deeds and seek professional advice for registering the title. You must consider registering a charge with the Land Registry. You have to rely on your legal advisors for carrying out this process smoothly and in a hassle-free fashion.

Conclusion

You need to stay alert from scammers while taking out a loan. You must remember not to provide your personal or business bank account details and information. Do not share your Social Security Number well in advance. Your identity could be stolen and your business may be billed. You must not take it for granted that a copycat name actually implies any association in reality. This seems to be quite a common strategy or trick used by the loan scammers. Do not take it for granted that a polished and professional website has to be legitimate. Do not forget that smart and sophisticated scammers actually are used to employing polished and sleek websites that have all features including informational articles, blogs, and others to fake legitimacy.