Someone had a bad experience with this type of service and called it fraud. Transactional funding in general can’t be fraud. Or is it?
Hi,
No a Transactional Funder makes cash money available for a fee! Now someone could say it's an awfully high interest rate to borrow $100,000 dollars for example for 24 hours for $1000 dollars, however you could not make the money on your deal without the temporary funding so cost of cash is neglagible if you make $10k or $15k.
A $1000 dollar one point fee is paramount to a 365% interest rate! (I think that’s right)
GR
If I could make $10k or $15k on a deal I had to spend $1k for funding fee, I wouldn’t be too concerned with the $1,000 fee. I don’t even have to pay fees upfront, which is a good thing for me not to worry about coming up with the money right on the spot as soon as I get funding.
It 's not…Transactional Funding is necessary if you really needed to swing the deal and always fully disclose to avoid fraud.
So this make two people that says transactional funding is not fraud to that one naysayer who said it is fraud. Anyone else agree that transaction funding is legitimate?
Transactional funding is not fraud, if done properly, like any other money transaction.
Legitimate transaction lenders will make sure that fees are fully disclosed upfront and not charge excess fees, especially upfront. I have known of transactional funding lenders getting sued because of charging high fees at closing (not disclosed at application), upfront processing fees or referral fees.
It also depends on the State where the lender is issuing the loan: some State have restrictions on fees that can be charged.