The Fakers: How to Avoid Them When Seeking Funding
Welcome to Part III of our Complaints Series.
Have you ever been to a show where you see a fake Marilyn Monroe or a Tina Turner lookalike or even Cher? They look so much like the real deal that you can barely tell the difference!
While this can be very entertaining when you pay to see such a show, other times it’s not so funny. Clients come to us on a regular basis with a bias against us. Why? Because they’ve come face-to-face with lookalike merchant bankers or project financiers, paid money for their services, and never got their funding. This is a complaint we hear often.
So what’s going on? Well, one of the first things you have to watch out for are lenders/investors who call themselves ‘bancs’. Not ‘banK’ but ‘banC’ – the difference? Fake banks! There are lenders out there who call themselves bancs, like “national banc” or “investors banc” or “prudential banc”. These are not in fact banks and cannot guarantee funding like a real bank would, so watch out for those vampires.
There are also fake brokers out there (shocking, yes we know). These brokers depend on fees and will make clients believe that they either have money of their own to invest or are connected to investors with ‘deep pockets’. They will collect their fees and then will disappear (this is why our image up top has monopoly money – it’s just not real, and neither are these folks).
So by the time that clients reach us, they will often have been ‘played’ by these types of people and institutions at least once, sometimes twice, and they come to us full of fear and complaints. They don’t want to sign fees (see our previous blog on this), they don’t want to disburse any kind of money. They just want 100% financing. Unfortunately, that’s not the way of things, and you’ve got to put fuel into a car if you want it to run. But we warn our readers out there that if you’re looking for financing:
1) Always do your research. Research the background of your funder and make sure that they are who they say they are.
2) If you’re in talks with a broker, see if they belong to any professional associations.
3) Check the address! You’ll be surprised at what a simple Google Maps check will discover – we know of people out there who call themselves funders or brokers and when you look up the address, they’re working from a small apartment on a random street!
4) Beware of false promises. If what you are being promised sounds too good to be true, it is.
At the end of the day, sometimes it comes down to a gut feeling. Trust your instincts. This is why we welcome people to meet with us, either at our offices or via e-conferencing. We understand that sometimes there are unsavory characters and bad actors, and we have heard scary stories from our clients and so we wish to prevent others from being taken advantage of.
While we’re certainly not part of The Fakers Club, we’re well aware of them are aware of our clients’ fears, and we are always ready to address them.
Always make sure that you make an informed decision in all cases,
All the Best,
Capital Corp Merchant Banking