More small businesses being conned by rogue lenders

More small businesses being conned by rogue lenders




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Despite claims to the contrary from banks, small and medium sized businesses are still saying that they face a near-vertical struggle in trying to access finance in the current climate.

As the Government promises Real Help for small businesses, it has been reported that by May, just four firms had been offered money out of over 300 that had applied for loans.

 

Now the Serious Fraud Office has said that firms desperate to raise finance are becoming more susceptible to fraudsters who are taking advantage of the freeze in lending and offering loans for a hefty, upfront fee.

 

These rogue lenders can charge as much as £20,000 for “finding” private investors and overseas financial institutions to provide the loan. However, once the fee has been paid the loan never materialises.

 

Bridging & Commercial has heard from one broker how this happened to a client of his who needed bridging finance. Ken Crouch, from River Ridge Consultancy, said: “The company charged one of my clients £2,500, plus I heard of another case from a broker colleague where he had to ask his client for a whopping £14,000. Both these fees were paid and both cases failed in that no bridging finance was forthcoming.”

 

The Serious Fraud Office has said they have heard more cases of these rogue companies striking in the downturn and want victims to contact them with specific details on their fraud reporting line: 0207 239 7388.

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