The Dark Side of Start-Up Financing and an Open Letter to Direct Business Lending

Dear Direct Business Lending,

Let me make this as clear as possible: stop calling me. Furthermore, forget you ever heard of me. Erase my contact information from your collective consciousness, stop passing my number from one phone jockey to the next. Just. Stop.

Sincerely,

The Woman Who Never Asked You to Contact Her in the First Place

Leaving no stone unturned in the hunt for start-up capital has a high probability of waking up some snakes.

I’d researched enough to know that it was considered next to impossible for a new business to secure start-up funds and working capital by traditional means, but it still seemed like the place to start. Just like writers who know it’s tough to get an agent or publisher to read your manuscript, but go that route for a while before considering self-publishing. It’s what you do.

Sure, there’s venture capital, but that’s more for tech start-ups or inventions/new products–there aren’t a lot of angel investors who are interested in a small town, local retail specialty shop. (Though I did reach out to the director of the local arts center, and got a response, she just didn’t have any referrals for me at the time I was looking.) And there’s traditional investors, but those strategies involve giving up a piece of your business and, from what I’ve read, seem to be more focused on finding things that will build and then can be sold (the exit strategy) to, hopefully, recoup their investment. Not the route I really wanted to take. (Plus, by the time that was my last resort I was tired of asking others for permission.)

Entrepreneur magazine and other business blogs have been singing the praises of non-traditional (usually online) start-up funding for businesses for quite a while. According to some, besides friends and family loans (which, no), it’s really the only way to go. Well, I tried that, and here’s what happened.

First you have to weed out the sites that really are in the business of lending to existing small businesses who want to expand. Kabbage.com is one of that sort: they offer lines of credit, which is better than a flat-out loan, but you have to show an existing business history to qualify (just like with a traditional bank). They’re on my radar for later on down the line, but not a good option, now. Lending Club actually is somewhat reputable. but I could qualify for maybe $10K when I contacted them (not even enough for inventory, much less anything else). Most of the rapid-response lenders concentrate on your credit score. Mine’s good, but it’s not enough on it’s own. Like the banks, they want you to have a good score, which takes credit history to build, but you have to stay within a certain amount of current credit usage for them to be happy. That’s my downfall: I carry balances on my credit cards, more than the 45% usage level they want.

Or, that was the reason Seek Capital turned me down. Seek was a company that showed up as a search result and I figured, hey, why not? I got a call back from them fairly quickly and Ryan explained how they were able to offer unsecured (no collateral to back it up–we have some equity in our home because we purchased below market value, but since we only bought last year it’s not a lot, not enough to really consider as an option) loans. They arrange for business credit cards that can be liquidated without the cash withdrawal penalties, no interest for the first 12-24 months, and then interest rates comparable to bank loans and not the usual credit card APR. Starting a business on credit cards is nothing new, this was just a different approach, one I’d never heard of before.

But, again, nothing ventured, nothing gained, right?

Now, to see if I qualified, they (like anyone else) needed to see my credit scores and reports. Thing is, they don’t want to do a hard pull of said info as that can lower your credit score, so they had an interesting work-around. They ask you to create an account at one of two credit monitoring sites for a $1 trial period that lasts a week. You then turn over your login info so they can access your reports (because it’s not a ding if you check your own credit report/scores). I wasn’t cool with this on several levels:

  1. Handing over passwords and security question answers, even if they were complete fabrications for the sake of the exercise) just defies all manner of information safety anything. Not happening.
  2. Both of the services they recommend have very sketchy reviews about charging past your cancellation and the 7 day trials being more like 6, in reality. Not happening.

I did ask if I could pull the reports myself and just send them in directly. And while I prefer using MyFICO.com (where I get my annual free reports, no hiccups or sneaky practices), they preferred Experiean. Fine, Experian is one of the 3 reporting agencies and while they also offer a monitoring subscription, they also offer a flat fee for all three reports and scores. Yes, I’d much rather pay $40 for the reports and be done with it than $1 for a “free trial.” I know it sounds counter-intuitive, but it felt like the safer option, overall.

So where does DBL come in?

Well…. A couple of days after Seek said no, I was driving home and my phone rang. People don’t call me that often, so I didn’t have my earpiece in and had to fumble for my phone and also fumble with the iPod to turn off the audiobook I’d been listening to. Thank goodness it wasn’t raining!

Anyway, it was some stranger from Direct Business Lending saying that he’d been given my information and that I was looking for a business loan.

Two problems with this:

  1. I’d already decided to go another way with The Crafty Branch and was not seeking funding any longer (which I told him).
  2. WHO had given him my information???

When questioned, random caller #1 (I didn’t get his name being both flustered and driving at the time, not exactly prime note-taking situations) admitted that it was Seek who’d passed along my information. I explained that I hadn’t authorized that and that I wasn’t having this conversation. End of story, or so I thought.

That was Thursday, June 11, 2015.

Imagine my surprise when I got not one, not two, but three calls from them the next day! After the first call of the day, I used an app on my phone to block their number. This apparently means that it might ring once (or not) before being routed straight to voicemail, but it has more or less saved my sanity from these guys who just. won’t. give. up. If it had been anything other than a violation of my privacy I might have admired their tenacity.

Jennifer, hey, this is Mike from DBL. I’m excited to give you a call back, it looks like you spoke with one of my friends yesterday. My number is xxx-xxx-xxxx extension 644. Looks like I’ve got a few options for ya and want to go ahead and talk to you some more. [repeats phone number]

While fairly innocuous, the voice mail kinda set me off. Friday has been a long, tiring day, and that chirpy voice mail just pushed the wrong button. So I called ’em back, and I left a voicemail of my own. I’m not proud of it, I’m fairly certain I avoided swearing at them, but I do recall the words “or I will rain down 7 kinds of holy hell on you” leaving my mouth. Not my finest moment, but it is what it is. I also promptly filed a complaint with the BBB in Utah (though I know better than to expect anything from it–the BBB can be bought folks. Sorry to shatter your illusions.)

I also fired off a ‘not cool’ email to my contact at Seek the first day and, after the continued calls on Friday, called Seek directly. Seek denies sharing my information, but who else could they have gotten it from? That piece of information was the resolution I requested in my BBB complaint, but I’m not holding my breath.

After a quiet weekend I was really hoping they’d forget who I was. No such luck, as Monday, June 15, 6 calls from DBL were logged and blocked, including this gem of a voice mail:

Hi Jennifer, this is Benjamin with DBL I just received your file and request for some business funding and I went ahead and gave you a call. I actually did just pull up your file right now and looks like you were upset that a company had gave us your email and your phone number. I mean, that’s really not a lot of information to pass on to someone. Either a) you’re a start-up company or you didn’t make enough money with your current company where they wanted to even take a look at your application or really see how much you’re asking for. So they sent you to us and we’re the start-up specialist. There won’t be a bunch of other companies contacting you because we’re really the only ones out there who specialize in start-ups. So, you know, you could get upset that they passed us your simple name and phone number that someone could get out of the phone book–maybe you can’t get someone’s email out of there–but y’know I’d go ahead and give us a chance. There’s a reason why they had us contact you, we do specialize in start-ups, but I mean they didn’t even really take a look at your file or want to give you funding so I don’t know why you’d be upset they’d pass on to someone that could actually help out and get what you wanted to. So if you want to you can give me a call back, I’d appreciate it, we could dialogue and see you’re a good fit for us and we’d be a good fit for you, as well. My number is xxx-xxx-xxxx extension 628, and I just want you to be as optimistic as possible. It’s not a huge deal, I get SPAM and junk mail from other websites I sign up at and you know I don’t get mad that my email is flying out there [laugh] people are sending me stuff. it is what it is, it’s the age of technology! And we’re here to help, Jennifer, so I hope you see that. Thank you.

First off, did you catch how he compared their calls to SPAM and junk mail??? Hit the nail right on the head, I think! And, no, to my knowledge there’s not a way to look up cell numbers in the phone book. In fact, my number is on the do not call registry because I don’t want crap like this coming at me at any given time. But this whole thing is hinging on the “request for funding” which I never made to them. And it is a big deal that people are passing off my information because, the obvious folly with Seek notwithstanding, I am very careful about who I have contacted in regards to my business plans. It wasn’t their place to, they had no authority to do so, and I’m justified in being a bit miffed over it–I don’t need your permission to be pissed off, Benny!

It didn’t take long to find a site full of complaints about DBL by people who had bought into their scheme (they try to sell you a business plan package for $3,000 or so, in installments, of course) and they couldn’t get the services they paid for or–irony of ironies–even a call back! Meanwhile, I can’t see to get these guys to stop calling me!

Thankfully, June 16th only yielded one blocked and logged call, and that seemed to be the end of it. Until yesterday, that is, when yet another dude at yet another extension called to follow up with me. Those two calls yielded ho-hum voicemails from Steve at extension 603 and Doug B at extension 629 very much like the first one.

Look, folks, there is not following up to do. I didn’t ask you to call me, I don’t want you to continue calling me (and, apparently my file contains my displeasure at your earlier calls, so no excuse there), and I’d really love it if you deleted my file and everything else about me!

Since they’ve stayed cordial, if annoying, I’ve had no reason to report them to any higher authorities–be it someone in the Dept of Corporations/Dept of State in Utah or to the FCC for any communications violations. I will continue to block their calls, continue to save and transcribe their voicemails should the status quo change. But, really, if I never heard from these guys again it would be too soon.

It’s tough to move on to the next option when bottom-feeders like DBL won’t leave you alone, but I’ll just keep blocking them and rolling my eyes as they fail to get the hint. Because I’ve got better things to do!

 

 

 

1 2 3 4 5 1,661