Lender Promising 100% Financin

[Antonio Cucciniello]

I have been searching for lenders on LinkedIn that can give lower down payment requirements. One reached out to me about lending with 100% financing.  They give business loans at 6 month to 15 year terms with 5K minimum to 2 million, only needing 1% of loan amount in proof of funds.

This sounds too good to be true, I was wondering what to watch out for? I have used conventional loans my entire process through and this would be my first time through a private lender! I have a deal that I want to get in my area that has great cash flow at asking (rarely happens). So I want to act quick but don't want to be screwed. What can even happen? I have been hearing of scams but don't really know what that means!

[Kyle J.]

Originally posted by @Antonio Cucciniello:

They gave me a loan terms sheet: 5.4% for all loans it says, no collateral anywhere between 6 months to 15 year loan terms. @Steve Morris

Just want to make sure I understand.....some "private lender" who initiated contact with you online through LinkedIn is saying they'll do 100% financing up to 2 million dollars, up to 15 year terms, have already told you it'll be at 5.4% interest rate for "all loans" (so obviously they don't care about your credit score, DTI ratio, etc), and they don't even require any collateral (so the loan will be unsecured)?

If I got all that right (or even most of that right), this is almost certainly a scam.  Expect to get asked for some sort of loan application fee soon, or perhaps they'll drag it out longer and make you think you're actually getting the loan and then ask for "wire transfer insurance" before they can wire you the money just before closing.  You might even pay it because you've come so far and don't want to lose the deal.  However, it's just another tool in their scammer tool belt.

You're better off cutting off contact now while you're ahead.  In the future, just know that legit private lenders are not out there emailing borrowers asking to loan them money.  It just doesn't happen that way.  That's the scammers who are doing that.