Red flags
Most funding offers are what they say. The ones that are not tend to share the same handful of signs. Here is the list, what a legitimate process looks like instead, and questions you can print and ask any funder.
✓ Checking what you qualify for does not affect your credit score.
Updated October 13, 2026 · Merchant Fund Express
Walk away, or at least stop and verify, if an offer asks for money before funding, promises approval before anyone has read your statements, pushes you to sign within the hour, leaves numbers blank in the agreement, comes from a company you cannot locate, or asks for your online banking login. Any one of these is a reason to slow down. Two together is usually enough to say no.
A real review reads your bank statements and credit before it produces numbers, and it shows you the amount, the payment and the total repayment in writing before you sign. Everything below follows from that.
| Red flag | What it looks like | What normal looks like |
|---|---|---|
| A fee you must pay before funding | Asked to wire or card-pay an "insurance", "processing" or "security" deposit to release funds | Any fee is written into the agreement and shown against the amount you receive |
| Approval promised up front | "Everyone qualifies" or approval stated before statements are read | An answer comes after a review of statements and credit |
| Sign-now pressure | The offer expires within the hour, or you are told not to read it | You have time to read every page and ask questions |
| Blank fields | Payback amount, payment, term or fees left empty "to fill in later" | Every number is filled in before you sign |
| No findable company | No physical address, no state registration you can look up, only a mobile number or free email account | A registered business with an address you can verify |
| Requests for your bank login | Asked for your online banking username and password | Statements sent as PDFs downloaded from your bank |
A bakery owner wants $50,000 and receives two offers on Tuesday, October 13, 2026.
Offer A says the bakery is "approved for $50,000" after a five-minute phone call with no statements sent, and asks for a $1,500 processing deposit by wire before funds are released. Offer B arrives after the owner uploads three months of statements and shows every number in writing.
| Offer A | Offer B | |
|---|---|---|
| Paid by you before funding | $1,500 | $0 |
| Fee written into the agreement | Not stated | $1,250, deducted at funding |
| Net proceeds | Unknown | $48,750 ($50,000 − $1,250) |
| Total repayment | Blank | $65,000 ($50,000 × 1.30) |
| Payment | "To be set later" | $1,625 weekly for 40 weeks, first on Monday, October 26, 2026 |
| Cash at risk if the company disappears | $1,500 with nothing received | None before funding |
Offer B may or may not be the right price for this bakery; that is a separate comparison, done with the offer comparison calculator. Offer A is not a price question at all. It shows four red flags at once, and the only certain number on it is the $1,500 the owner would lose.
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
More on avoiding fraud is in our guide to avoiding business funding scams. For warning signs specific to cash advance contracts, see merchant cash advance warning signs and confession of judgment clauses.
Print this page or copy the list. Ask every question in writing and keep the answers with the agreement.
A good funder answers all ten without hesitation. Our own pre-signing list is on what to check before signing.
Stop further payments, change your online banking password and contact your bank's fraud team if you shared login details. Keep every message and receipt. If money was sent, ask your bank whether the transfer can be recalled. Then report the company to your state attorney general and to the Federal Trade Commission.
A real review starts with your statements, not a fee. Run the eligibility check to see where your file stands without affecting your credit, or apply and upload your statements as PDFs. You see the amount, the payment and the total repayment in writing before you sign anything.
Be very cautious. A request to wire or card-pay a deposit before funds are released is one of the most common signs of a scam. Any fee should be written into the agreement and shown against the amount you receive.
No honest review produces an answer before reading the file. Approval stated before statements and credit are reviewed is a red flag.
No. Send statements as PDFs downloaded from your bank. Never share your banking username and password with anyone.
Do not sign until every number is filled in: amount received, total repayment, payment, frequency, term and fees. Ask for a completed copy in writing.
Look it up on your state's Secretary of State business search, confirm a physical address, check that the email domain matches the company and confirm the legal name on the agreement.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
