Seek Capital – An Illicit and Well Organized Scam
Insufficient funds are a major threat to any business. Without sufficient funds, businesses cannot meet their financial obligations when they fall due. Additionally, lack of funds limits business growth and expansion. Access to bank loans is a cumbersome process as banks require financial statements, assets as collateral among numerous documents. The long process and strict requirements therefore locks-out a high number of businesses from loans. That is where Seek Capital LLC comes in. The company connects businesses to credit facilities including banks. According to the company’s website, Seek Capital LLC is not a loan lender, broker or agent but refer qualitied clients to lenders (https://www.seekcapital.com/). The company claims to have links with various banks and trusted partners. The company also clearly states that it does not have access to the full terms of the loan and does not control the actions of the lenders. The company is therefore a third party player in the loan process.
The company provides various attractive features which can lure any business with cash issues. These features include free application process, application process taking less than 2 minutes, no collateral needed, no tax returns requested and flexible payment options. Customers can also apply entirely over the phone through the official number ((866) 695-0279) which is displayed on the official website. The entity claims to help business owners access funding by increasing their business’ credit lines. In simpler terms, the company applies for extra credit on behalf of the business from different banks and creates a flexible payment plan for the business. This analysis will evaluate whether the company’s promises and claims are based on facts.
The company creates credit options for small businesses. The company therefore targets businesses struggling with financing issues and cannot access credit directly from banks. One of the company’s customers clearly defined the kind of customers that the company targets. According to the customer, Seek Capital LLC targets businesses that are less than 3 years and in search of loans (https://www.yelp.com/biz/seek-capital-los-angeles). Since the businesses have existed for a relatively short period, they are expected to struggle before accessing loans from banks. The company promises to open different lines of credit for the customers which would enable them access previously inaccessible loans. Small businesses that are therefore the primary target of the company including sole proprietorships, partnerships and small vendors.
How the company CLAIMS to operate…?
The best way to know how the company claims to operate is to evaluate the process outlined in its official website. According to the company’s website, the credit process takes place in three simple steps. First, the customer selects their preferred type of funding. The company offers various types of funding including revolving lines of credit to Covid Government Funds. The second step is the application process which takes less than 2 minutes. Customers can apply through the company’s website or call the official telephone lines. The company claims to respond to customers’ application in minutes. The last step involves getting a dedicated agent. The company provides a dedicated agent who will guide the customer. The process seems straight forward and simple. The company does not outline the charges for each step but assures customers that the charges are affordable. The website also does not describe the payment terms for the loans and any other details. Various financial institutions are displayed as partners on the website including Top10.com, Consumer Advocate, Blue Vine, National Funding, and Ondeck among others (https://www.seekcapital.com/). These big names emphasize on the legitimacy of the company. The company has posted reviews of various customers which are all positive. One customer has claimed that the company keeps its word. Judging the company from the details in the website, the company seems like the holy grail of small businesses. But wait, we have to dig deeper to determine whether the company keeps these promises.
How the company ACTUALLY operates…
The company’s operations can be understood by evaluating the claims of different previous customers. The credit process begins when the customer contacts the company for a business credit. According to a customer, the company operates mainly over the phone and emails. When the company contacts a customer or the other way round, the company passes the customer through different sales agents. The agents explain to the customer how the business idea is brilliant and the need to take the line of credit. These sales representatives aim at compelling the customer to take the loan. Now the customer can either accept or reject the loan.
According to a different customer, if the client rejects the loan process and wants to cancel the application process, the company demands that the customer should pay USD 495 which is the application cancellation fee (https://www.yelp.com/biz/seek-capital-los-angeles). .
Let’s take the route where the customer accepts the loan application process. A customer claimed that the sales representatives take the customer through the entire process in a single call and sends documents via email which the customer is supposed to sign and send back without disconnecting the phone call. The representatives make it seem like the loan application process is a matter of life and death. The extremely quick application process does not give a customer time to think hence the customer ends up signing legally abiding documents and providing personal information which can be used to open new credit cards. A customer claimed that the sales representative does not even request for the name of the business yet he claims to open a credit facility for the business (https://www.yelp.com/biz/seek-capital-los-angeles). Immediately the customer representatives acquire the required personal details and customer authorization to act their representatives, the representative claims that they will get in touch with the customer within an unspecified time.
The next step of the process involves opening numerous credit cards with the customers’ details in numerous banks. The company promised that they will open new business lines of credit. However, the company opens new personal credit cards. The company proceeds to request credit card funding from different banks. The company sends numerous credit requests on behalf of the customer without informing them. According to a customer, the company made a total of 12 credit enquiries on behalf of the customer (https://www.lendio.com/bp/lender-profile/1093). The customer claimed that the company did not open a new business line of credit but basically charged the client to open new personal credit cards. The company applies for personal credit card funding from various banks without the customers’ approval or knowledge.
Once the company acquires credit funding through the credit cards, the company now turns to the customer for payment. According to a customer, the company took the total amount of cash in the credit card and then charged 11 percent of the total amount as service fee (https://www.lendio.com/bp/lender-profile/1093). The customer therefore owed the company 11 percent of the total credit approved and could not access the funds requested from the banks through the newly created credit cards. Another customer was charged a fee of 12 percent of the total amount that the company acquired through the credit cards (https://www.yelp.com/biz/seek-capital-los-angeles). Majority of customers felt deceived since they could have created the personal credit cards without the help of the company. Additionally, they felt that the company overcharged for seeking credit card funding which the customer could have done for free.
Cost-Benefit Analysis of using the company’s service
The main benefit of using the company is access to personal loans. People who do not know how to request for personal credit facilities through their credit cards can therefore benefit from the company’s services. Some customers claimed that the company helped them access business credit facilities. However, no customer disclosed the amount they received, terms of payment and service charges they incurred (https://www.lendio.com/bp/lender-profile/1093). Additionally, most people can request for credit card funding hence charging them for the services is unrealistic. The personal credit card loans are therefore unhelpful to people seeking loans for their businesses.
There are numerous costs and negative impacts of using the company’s services. First, the services expose the customer to poor credit ratings. A customer complained that allowing the company to apply for credit card financing lowered his FICO score. Credit inquiries account for over 10 percent of the FICO score hence making numerous inquiries adversely affect the credit score of the customers.
Secondly, the company charges extremely high for opening credit cards and seeking funding using them. Customers claimed that the company charges 11-12 percent of the total amount in the credit cards and threaten the customer to ensure that the customer pays them first. The charges are high bearing in mind that the customer can just walk to the nearest bank and request for assistance to finance the credit cards for free.
Thirdly, the company leaves the customer with a high amount of debt to pay. The company does not care about the interest rates paid for the loans as long as they can access the credit card finances. The company does not even disclose payment policies associated with the such credit processes. A customer claimed that he was left with 29.99% interest rate payments burdened after the process https://www.lendio.com/bp/lender-profile/1093. Clearly the costs attributable to the services outweigh the benefits.
The sales representatives are trained to lure customers into taking the loans and signing the legal abiding contracts without a second thought. The sales representatives take turns to convince customers and promise to assist the customer throughout the process. Although the customer services agents are friendly before the application process, they become rude and threatening after the application process. The agents threaten the customer to compel them to make the exorbitant charges. The agents are also deceitful as they fail to disclose important information concerning the loan process. The agents fail to seek authorization of the customer when opening applying for new credit cards which is unethical.
How long it takes to access the funds
Once the company has access to the necessary information, the employees works day and night to access the funds. According to a customer, the entire process took less than two weeks (https://www.consumeraffairs.com/business-loans-and-financing/seek-capital.html?#sort=recent&filter=1). The company’s employees claimed that the time taken for the funds to reflect on the users’ credit cards depended on the customer’s credit score. This is true and justified as a higher credit score would allow the company to successfully request for funding of the credit cards. Customers therefore expect new credit cards with unrealistic credit funds within two weeks.
Refunds and cancellation processes
The company does not provide the refund policy statement on its website or social media sites. The company claims that the application process is free but once the company wants to opt out of the process, the company charges a ridiculous fee of $495. The company does not provide a price list for its services and threatens customers to make them pay. None of the analyzed customers claimed to have received a refund. In short, you cannot be refunded and you have to pay the company to cancel the process (pay the company to do nothing).
Businesses have to meet high standards set by banks before receiving business loans. The analysis has demonstrated that Seek Capital LLC swiftly changes from offering lines of credit to opening new credit cards and requesting personal credit financing via the credit cards. The analysis has demonstrated that the company actual activities are extremely different from what they promise to do. The company also charges extremely high fees which they do not disclose upfront. Based on the analysis, the company’s activities are questionable although some customers claim to have benefited from the company’s activities. The analysis is not aimed in any way to hurt the reputation of the company but to inform potential customers and other interested parties. The analysis was based entirely on customers’ claims and comments hence can be subject to criticism.
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