Merchant services companies are some of the best places for new and small businesses to get the cash advances they need to grow.
However, not all of these merchant cash advance lenders are honest or reputable, and fraud is becoming increasingly common in the merchant cash advances sector. Because of this, no small business can afford not to know the signs of fraud when seeking out a cash advance.
Here are three things to watch out for when pursuing your business’ options for merchant cash advances that could indicate merchant services cash advance fraud:
A failure to thoroughly explain the terms of the cash advance
Every reputable cash advances lender should be ready to explain all the facets of the agreement with their customers. If a merchant services provider asks you to sign an agreement after glossing over the fine print, it’s a good idea to be skeptical. Never sign a contract for merchant cash advances unless you understand all its terms and conditions.
Larger-than-agreed-upon withdrawals
During the repayment period of a merchant services advance, the small business will give a certain percentage of its credit card transactions to the lender. If the amount of money withdrawn by the lender seems larger than it should, it’s possible something fraudulent could be going on.
Negative BBB reviews
The Better Business Bureau is a vital resource for anyone looking to seek out a cash advance from a merchant services provider. On their website, you can find reviews from fellow small businesses that give valuable insight into the lender’s practices and reputability. If you’re still not sure if a lender is reputable, reviews on the BBB’s website should give you the answer you seek.
Have any other questions about small business merchant services? Feel free to ask us for more information in the comments below. Read more. Learn more at this link.
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