I have a lender who qualified me for $150k unsecured loan. But they requested that I send $5k as insurance while they obtain financing. I also had a lender request $3k upfront and he could get me 100% financing for a certain commercial deal. Is this beginning to be the norm? I refused to do both, because I never heard or seen anything structured in that way.
I then asked to use an escrow company and upon reciept of funds, I’d release the cash. the $5k lender hung up and the $3k guy requested half upfront and the rest will be paid at closing of the deal. I JUST COULDN’T DO IT I had no guarantee (except via THEIR contract agreement) and neither were local.
Do you think this is how brokers are getting double paid? Or is it a possible scheme?
When you say unsecured loan I take it your getting a personal loan or line of credit?
It is very very difficult for individuals to get large lines of credit, it just doesn’t happen, even an 800 mid fico doesn’t get $150k unsecured.
Two years tax returns and a $1m a year income, maybe!
Corporate credit is different.
New corporations can still get start up credit lines with a good business plan and the right management, 2 year old seasoned corporations can do better, and 5 year old corps with tax returns and a D&B rating do much better.
You can get loans if you know where to look with no personal guarantee and as a new corporation, but you have to have a solid business plan and the right officers.
Legitimate money will not ask for money up front! Now if you need a company to write a business plan or do market analysis this service require some payment in advance.
You can get references in that case and check the BBB for references, also talk with previous customers before making a decision.
Always pay by credit card (Visa, Master Card, AMEX or Discover) as your ability to recover funds if a service provider is a fraud is good.
We operate in the corporate market place for most of our businesses so we have much experience in funding start up companies and there operations.
TP: how about holding the funds in an escrow account? Once they can show they can deliver “good” funds for your real estate deal, you can release the funds to them.
This wouldnt be the true of an HML would it as all of my dealings with HML’s have involved an upfront fee of 2K-25K depending on the loan size, but they all came through at closing with the funds I needed.
It is actually illegal for anyone to charge you an upfront fee to find you a loan which is what they are doing.
If they are an actual lender they must itemize specifically what any money you pay upfront is to be used for and it is usually collected and paid to the vendor directly.
Example would be appraisal costs, attorney fees etc.
An honestly, with over 20 years of experience in lending I have never heard of anyone offering an unsecured loan for more than $10k to $15k and these are from institutional lenders (Banks, Credit Unions etc.) for which the borrower must qualify for.
In some rare cases some Banks and Credit Unions may extend large unsecured loans to select individuals that they have long standing relationships with (10 + yrs) and that can show they have the means to repay such a loan (typically high net worth individuals, high profile corporate executives etc.).
So the majority of people offering you any form of unsecured loan for more than $15k is 99.999% likely to be a scam, 110% if they ask for any money upfront from you … even $1.00.