Loans

If you've been at the small business thing for a while, you know getting a loan isn't a laughing matter. It usually involves the kind of collateral that requires a conversation with your spouse.

You might be considering sources like Funding Circle or On Deck. We've had decent success with these folks, if the owners have reasonable collateral and ownership isn't complicated.

After that, you'll likely be looking at groups that ask for some bank statements and a tax filing.

And congratulations, you're approved!!!!!

Wait. That was a little too easy… why?

As someone who does a lot of due diligence, I’m concerned when no one does a financial review of the company, its customers, etc, before making such a big decision.

What you're offered: Some cash and with a final cost roughly 1.3x - 1.4x your loan amount.

They won't tell you an interest rate, and honestly - some of their associates barely know how to calculate it. (I had a guy tell me I didn't know how IRR worked.)

I can tell you you're looking at something like 24% and up.

Wait up to where? Oh, a lot.

You'll get early pay off discount offers but the effective rate can get up to 186%. (high enough that you'll start looking up the word ”Usury”)

The next wonderful lesson about these pay-day loans: They share your info. A lot.

If you want to feel like one of the beautiful people in high school, now is your chance. You'll get assumptive text messages and emails galore.

Look, if you need the money and this is your only option be advised:

1. This is going to be incredibly hard to dig out.

2. You'll be required to make weekly payments over 6-24 months.

3. An easy application might turn into inescapable debt

Proceed with caution! Keep in mind that you could be putting the first nail in your business' coffin.