Don’t fall for “easy” predatory lending

    Financial pressures on small businesses are nothing new and neither is the problem of predatory lending. But, widespread access to the internet brought an explosion of financial providers (fintechs) and many new pitfalls to trap uninformed business owners. Excessively high effective interest rates, hidden fees, and exploitative terms can trap them in a cycle of debt. Those lacking financial expertise, those with limited access to traditional financing options and those desperate for capital often turn to low-documentation loans as a means of short-term expediency. Sadly, severe financial repercussions, including bankruptcy, loss of assets, and damage to credit scores, can follow with long-lasting effects on personal and professional lives. Learn how these “easy internet” loan products work and why your business should stay clear of them.

    Frederick Welk is a CEDF Business Advisor and serves as Director of Business Education and Communications. Before joining the organization in 2013, he spent more than 30 years in specialty retailing and franchise development, operating his own company for 23 years. As an adjunct lecturer at Gateway and Housatonic Community Colleges, he has taught a variety of entrepreneurship courses.