Have you ever been to a show where you see a fake Marilyn Monroe or a Tina Turner or even Cher? They look so much like the real thing that you can hardly tell the difference!
While this can be very entertaining when you’re paying to see such a show, other times it’s not as much fun. People come to me regularly with a preformed bias. Why? Because they came face to face with merchant bankers or similar project financiers, they paid money for their services and never got their financing.
So what is going on? Well, one of the first things to look out for is lenders/investors who call themselves ‘banks’. Not ‘bank’ but ‘banC’: the difference? Fake banks! There are lenders who call themselves banks, such as “national bank” or “investor bank” or “prudential bank”. In fact, these are not banks and cannot guarantee financing like a real bank would, so beware of those vampires.
There are also fake brokers out there (shocking I know). These brokers rely on fees and will make clients believe they have money of their own to invest or are connected to “deep pocket” investors. They’ll collect their fees and then disappear (that’s why our picture at the top has monopoly money on it, it’s just not real, and neither are these people).
So when clients contact me, they will often have been ‘played’ by these kinds of people and institutions at least once, sometimes twice, and they come to us full of fear and complaints. They do not want to sign fees, they do not want to disburse any type of money. They just want 100% financing. Unfortunately, that’s not the way of things, and you have to put fuel in the car if you want it to work. But let me tell you right here that if you’re looking for financing,
1) Always do your research. Check your funder’s background and make sure they are who they say they are.
2) If you are in talks with a broker, see if they belong to any professional associations
3) Check the address! You’ll be amazed at what a simple Google Maps check will uncover – we’ve heard of people calling themselves funders or brokers, and when you look up the address, they’re working out of a small apartment on a random street!
4) Beware of false promises. If what they promise you sounds too good to be true, it is.
At the end of the day, sometimes it all comes down to a gut feeling. Trust your instincts. This is why an honest banker or financier will welcome the opportunity to meet at his or her office or through electronic conferences. Sometimes there are unsavory characters and there are many scary stories of people being duped. While I’m certainly not part of The Fakers Club, I know them very well and hope I’ve addressed them here.