6 Cash Advance Scams To Watch For

In an unregulated industry, Greenbox Capital,s small business funding is a light in a dark place. Greenbox Capital is committed to not only performing at the highest level of integrity but also to transforming the industry from the inside out. We are transparent about our dealings and take pride in taking a stand against wrong doing within the industry.

scam alert cash advance

Committed to the safety of our merchants, we’d like to pass along the following red flags to watch out for when looking for working capital:

False Promises for the Future

A broker tells you that he/she will get you approved for something in the future by taking capital now.

There is no way a broker can guarantee this future promise because the funder makes all the decisions at the time of underwriting and any change in business performance or their policy would possibly change their decision. We hear often from merchants, when they call in to inquire about our products, that they had bad experiences with particular brokers and the conclusion is some future promise that was not delivered to them. The important part to know about any transaction is that any future promise there is no way to guarantee this. We have seen brokers make altered documents saying that the future promise is valid, buyer beware.

Brokers Charging Fees

Your broker should not charge you a brokers fee.

Brokers are paid by the lending company that funds you and the vast majority of broker agreements, across the industry, prohibits charging a brokers fee. Anything they say to the contrary is a money grab. Find an honest broker who will not charge a fee to your business.

Brokers Will Say They are the Direct Funder

Brokers wanting to win your business may present themselves as the funding company.

To determine who the real lender is, be sure to thoroughly review your contracts. Look at the fine print to ensure that the names are consistent with the company the broker says they work for. Brokers can be good but don’t be deceived by what you hear.

Brokers who offer your business more money within 30 days into the initial funding are putting you in breach of your contract

These brokers are putting you into a breach of contract with your current funding company and will tell you that the lender doesn’t care. This is not true, all debts are considered during the Underwriting process. Your funding company takes care to ensure that the funds you receive will not over leverage your business. Brokers, wanting to make a commission, don’t want to turn you away from seeking additional capital for fear of you working with another broker. Additionally, the more capital you obtain, or ‘stack’, on top of your existing debt, the less likely you are to repay your debts and the more likely your rates will increase, starting a vicious cycle of debt dependency, devastating your business.

Individuals posing as the investor for your funding company

Individuals may call you claiming to be the investor who financially supports your funding company.

This is completely fraudulent. Funding institutions are corporations with shareholders.  There is no sole investor that funds your business the capital. The capital of the company comes from a Bank or hedge fund or a pool of private investors but they do not participate in the operations of the funding companies business.

These impostors are attempting to poach you from your existing company by using lies and scams to trick you out of your standing contract(s). They will request sensitive information, such as your bank statements, to begin a funding process. If you receive a call like this, hang up immediately and contact your advance company.

Be Careful of Brokers who tell you they can get you double funded

Most funding companies will make sure verbally and in writing that the merchant agrees to only get one advance within a period of time.  If a broker tries to get you capital from two companies at the same time this broker is very unethical and you need to run. This is highly destructive to the business and the broker is manipulating the system, putting  ramifications for interfering with the transaction.