As we enter a new year, our increasingly networked society brings us great joy – stories from far-away friends and family, plans for good times ahead, and dreams of achievements in the year to come. But, our connection to global opportunities can also make us vulnerable.
Out-of-state companies with often-confusing lending practices are reaching small entrepreneurs at an alarming rate, even here in Vermont. Though the State of Vermont is working on solutions that can address issues presented by some of these online lenders, there are plenty of large and small companies whose solicitations could land in your inbox on a daily basis.
Is fast money online really a good deal?
What are they selling? Often, these lenders will bombard small business owners with offers of loans that are able to be written very quickly, based on limited information. At Community Capital, we’ve researched the fine print of these loans, and we urge businesspeople to be very careful in assessing the products. We have found hidden fees, triggers to much higher interest rates if any payments are missed and language that allows daily withdrawals from business owners’ accounts.
What can happen too often is that the daily withdrawals and high fees can start to constrain a small business’ cash flow, in a world where cash is crucial. This leads businesses to go back to the same source for additional loans, in part to cover the payments on the first loan. Community Capital has already seen this play out among Vermont businesses – our borrowers and potential borrowers – and it can have serious and swift impacts on the business, as well as making it difficult for us to assist when a business has no remaining ability to service debt.
Transparency and integrity in small business financing
So how can we help? With significantly lower interest and fees, our loan payments are flexible and fixed, with monthly and available seasonal payments, not daily. We clearly talk you through all of the fees and rates you will be charged, we allow early repayment without penalty, and we offer a great deal of flexibility in case things don’t go as planned for your business.
As with online lenders, we work with start-ups and people with less-than-perfect credit. But we offer technical assistance to help to build a solid foundation for future growth, business planning in the event of bumps in the road, and most of all, we are invested in this state: We are Vermonters.
We are Vermonters
Community Capital is grounded in being an advocate for Vermont businesses, our borrowers. You are not just a borrower, and we are not just lenders. We are all real people with authentic business relationships, and will always have been, and always will be, located and invested in Vermont.
Thank you to our borrowers for all your good work. As we move into 2019, we will continue to do our good work, dedicated 100% to partnering with all our borrowers and colleagues to advance Vermont’s economy.