By far and away the most common gripe that brokers have is "backdooring," which was recently spotlighted in a deBanked story. Now more than ever brokers have to have their guard up when choosing a funder to submit to. Here are some tips to help you with due diligence on a funder:
- Is the sophistication of their website commensurate with the amount they claim to fund per month? Or is it some bare bones 2 or 3 page template with generic and/or copy and pasted text?
- Does the language on their website sound like something a broker would say? If it does, that's a red flag.
- What states is the company licensed to fund or lend in? If they just say "all states" but can't link you to their state license or registration, they're lying to you.
- How is commission paid? If they're going to backdoor you, they'll dance around this question and say it depends.
- What's their overall online presence like?
- Do you know who the owner of the company is? Have you done a full background check on them?
- What do the online reviews say about them?
The above is just the tip of the iceberg but you'd be surprised by how many brokers fail to do any research at all, instead relying entirely on how slick someone sounded on the phone about being able to fund their unfundable deal. So be careful out there.
Another great way to make sure you're in the know about what's going on and who's who is to make sure you meet all these people in person, which you can do next month in New York City at Broker Fair 2024 on May 20. Good luck!
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