Federal Reserve Bank of New York

Exposing Online Lenders: Hidden Interest Rates & Fees Can Bankrupt Businesses

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NEW YORK, NY (April 12, 2018) excerpt via ENTREPRENEUROnline lenders are facing increased scrutiny as lawsuits and investigations uncover the sky-high interest rates, hidden fees and unsustainable repayment plans that can devastate small businesses.

Mark Abell reports in Entrepreneur that online lender Kabbage Inc. is being sued for allegedly partnering with a bank to offer interest rates that surpass the legal limit.

The state of New York may begin regulating online lenders after a Federal Reserve study determined that there was “significant potential for unscrupulous online lenders to exploit consumers through predatory practices such as unusually high interest rates, lack of disclosure of hidden fees, and unclear loan terms.”

Read the entire article here.


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Dispelling Myths About Business Financing

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NEW YORK, NY (April 4, 2018) excerpt via FORBES - The world of small business lending can be mystifying and immensely frustrating to entrepreneurs, with copious misinformation from predatory online lenders and questionable sources.

Levi King at Forbes presents a guide to dispelling common misunderstandings about business loans, and what it takes to qualify for one. He describes his dismay at the proliferation of misleading online articles, “perpetuating business credit myths and misconceptions that cost me thousands of dollars when I was starting my own small business. This bad advice is continuing to cost American entrepreneurs millions of dollars each year -- and, for many of them, their dream.”

King additionally reports that only 46% of business owners are satisfied with loans from online lenders, according to a study by the Federal Reserve Bank of New York, illustrating the significant problems that come with the convenient but predatory online lenders.

Read the entire article here.


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