Avoid These Equipment Financing Traps That Cost Businesses Thousands - Robert Misheloff

Equipment financing scams target busy entrepreneurs who need tools and machinery to grow. The most dangerous scheme? Companies advertising impossibly low rates, then demanding upfront fees before securing actual approval. Contracts contain hidden clauses making these payments "non-refundable" when real terms arrive much worse, or never materialize.

Other red flags include automatic lease renewals requiring cancellation within narrow windows (miss it and pay another full year), deposit schemes where companies simply disappear, and interim rent manipulation, adding phantom months to your bill.

Protect yourself: Never pay significant fees before final approval. Verify companies through BBB ratings and complaint searches. Read every contract clause about renewals and refunds. Ask when the lender gets paid—legitimate companies earn commissions only upon successful financing delivery.

Work with lenders who have dealer referrals and established reputations. If rates seem unbelievable or pressure tactics emerge, walk away. Your business deserves transparent financing partners, not predatory traps.

Robert Misheloff