AmiSight 1/12: Predatory Online Lenders Are Raising Their Ugly Heads Once Again
Predatory short-term online lenders, who disappeared into the woodwork once the pandemic started, are raising their heads again – inflicting pain on entrepreneurs and business owners.
Here is one way NOT to deal with supply chain pressures. Earlier this week, I spoke to an entrepreneur whose suppliers are now demanding pre-payment for products and services to get ahead of the queue. In a nervous pinch, he signed up for a loan that he had a year to pay back. I estimate his APR to be about 70%. His cash flow is now so tight; there are many other problems to contend with.
We will help this entrepreneur and take out his short-term online loan with an SBA loan that he could have gotten in the first place. But, in the meantime, he could have saved himself a lot of sleepless nights.
If your cash flow is getting tight, don’t jump on the first offer you see on the internet or get telemarketed about. Instead, take the time to understand your options and alternatives.