Everyone in business is seeking an edge; that one "thing" that puts them over the top and wins the deal. Lending is no different and in the world of alternative-private lenders the pressure to be the one funding large deals is intense. Anyone who has applied for short term capital will no doubt be familiar with what I'm talking about. Once an application is in review for an offer, the merchant tends to get "phone bombed" by high-pressure salespeople all looking to close the deal.
This pressure leads some brokers to use misinformation (aka lies) to win over merchants who, for whatever reason need the capital but lack the time and knowledge to properly vet their funding offers and the brokers who make them. The results are always bad for the merchant as I can personally attest after seeing hundreds of good offers wasted in favor of butt-ugly ones.
In the last few weeks I've lost several funding offers which, although they were superior in every way (rate, term & fees) the merchants chose to fund with other lenders' offers and pay more with inferior terms. One merchant even scolded me when I tried to warn him that he was being manipulated into an inferior deal. This is frustrating but not surprising. Brokers who speak with merchants will say almost ANYTHING regardless if true or not in order to close the deal.
Most business owners I speak with that apply for short term working capital simply want a clear offer with all costs and terms spelled out so they can make an informed decision about taking on debt for their business. They also want an honest counter party (lender) who will perform and provide personal service for whatever needs or questions they have.
Speaking personally, it's tough to watch my own efforts wasted after spending much time and hard work to secure optimal funding only to see them eventually take capital with worse terms elsewhere because they believed lies they were told. Having said that, it's perfectly normal to have another lender out-compete me and win on their merits - I'm not always the best offer.
Lenders need to find a home for the capital they manage and qualified borrowers are not easy to find. When an approval is made, the incentive to fund asap is intense! I made a commitment to myself however that I would never resort to dishonesty in order to win business, I re-new that commitment to all my clients daily and I truly wish the best to anyone who has chosen to do business elsewhere for whatever reason.
For those business owners who share my commitment to honesty call me for an offer!! Count on me for straight talk, solid offers and no games - I return calls!