The Counterfeiters: How to Avoid Them When Finding Project Finance

Have you ever been on a show where you see a fake Marilyn Monroe or a Tina Turner lookalike or even Cher? They look so real you can hardly tell the difference!

While this can be very entertaining if you’re paying for a show like this, sometimes it’s not that fun. People regularly come to me with a preformed bias. Why? Because they faced peer merchant bankers or project financiers, paid money for their services, and never received their funding.

So what’s up? Well, one of the first things to look out for is lenders/investors who call themselves “bancs”. Not ‘banK’ but ‘banC’ – the difference? Fake Banks! There are lenders out there that call themselves bancs, like National Banc or Investors Banc or Prudential Banc. These are not actually banks and cannot guarantee funding like a real bank would, so watch out for these vampires.

There are also fake brokers out there (shocking, I know). These brokers depend on fees and will fool clients into believing that they either have their own money to invest with or are connected to “deep pocket” investors. They will collect their fees and then disappear (that’s why our picture above has monopoly money – it’s just not real, and neither are these people).

By the time the clients reach me, they are often “played off” at least once, sometimes even twice, by such people and institutions and come to us full of fear and complaints. They don’t want to sign any fees, they don’t want to pay out any money whatsoever. They only want 100% financing. Unfortunately, that’s not the way things go, and you have to put fuel in the car if you want it to run. But allow me to say right here that if you are looking for financing,

1) Always do research. Research your funder’s background and make sure they are who they say they are.

2) When speaking to a real estate agent, make sure they are affiliated with a professional association

3) Check the address! You’d be surprised what a simple Google Maps check will uncover – we know people out there who call themselves financiers or brokers and if you look up the address they work in a small apartment on a random street!

4) Beware of false promises. If what you are promised sounds too good to be true, it is.

In the end it sometimes comes down to gut feeling. trust your instincts For this reason, an honest commercial banker or financier will welcome the opportunity to meet either at their offices or via e-conference. Sometimes there are unsavory characters and there are many scary stories of people who have been scammed. While I’m certainly not a member of The Fakers Club, I’m well aware of them and hope I’ve addressed them here.