But, but my salesperson told me…

Steve O'ConnorAlternative Financing, Business Working Capital, Capital Advance, Funding Options, Merchant Cash Advance, UncategorizedLeave a Comment

“You should have read your contract” are words that a business owner only hears once they realize that the service they paid for, the asset they purchased, or the financing they secured isn’t quite what they though it was.  It’s a sentence no one wants to hear, and in the case of capital advance providers like Wellen, a sentence no one wants to speak.  It means there’s a fundamental misunderstanding of terms that is guaranteed to leave both parties with that sinking feeling that something is very wrong – and more importantly – is about to cost somebody money.

If you’re a Wellen customer, you participated in an online video call with us at the time your business was first funded.  You had the terms of the Wellen agreement confirmed with a Wellen representative, and had a chance to ask any and all questions you may have had.  Wellen gives every customer that time to fully understand our transaction before it’s too late.  So whether its a capital advance contract, or any agreement you sign on behalf of your business, we think it’s always a good idea to take the time to get to know anything you’re thinking of signing.

To avoid the costly confusion that comes from not fully understanding a contract, here’s a few tips:

  • Look for clearly described Terms and Conditions.  This section of a contract should describe the basic contours of the transaction.  Make sure you know if you’re signing a purchase and sale transaction or a lending agreement, for example.
  • Keep an eye on Definitions.  Here’s where you’ll get the best handle on how each party to the agreement is identified, and how to understand the specific meanings assigned to certain words, as this can significantly impact the interpretation of the document.
  • Pay attention to the numbers.  Make sure you know what price you’re paying – including all fees and charges – before entering into the transaction.  If it’s not clear, make sure to ask the other party to make it clear.
  • Assume nothing.  Contracts and their legal language exist to provide clarity and avoid doubt.  If anything isn’t clear to you, maybe it’s not a very good contract.
  • Ask for help.  If you don’t fully understand the agreement, consult a legal professional.
  • Don’t rely on what you have been told.  The contract you sign is the only thing that matters in the end.  By entering into the contract you may be encumbering your business, giving up rights, and agreeing to pay a price.  So be careful, and make sure you know what it says!  In the end, what’s likely enforceable in the courts is the actual text of the agreement, not your recollection of the agreement, or what someone else told you it said.

In the small business finance space, deal brokers and sales companies play an invaluable role.  They are experts at sourcing funding opportunities for business owners because they have relationships with numerous and varied sources of capital, and will often present customers with multiple options.  Its easy to get the details mixed up, so yeah, we’ll say it now instead of later…read your contract!

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