How to Find a Finance Company You Can Trust

Finance companies are there to help you open up doors in the business world; they are highly beneficial for their purpose, but they take a great deal of trust to use. Whether you're seeking a business loan, investment opportunities, or financial advice, the credibility and reliability of the finance company that you choose can significantly impact your financial wellbeing. With that being said, how do you go about trusting a finance company? What signs are there to look out for, both positive and negative?

How to Find Legitimate Finance Companies

The first step in finding a finance company you can trust is knowing where to look; in a saturated market, there will be rotten eggs hidden amongst the good ones. The internet is perfect for finding what we need, but unfortunately, it can also be perfect for scammers and cowboys, so using alternative methods could be a way of building confidence. One good example of an alternative method is through word of mouth; recommendations from others who have found trusted companies are a reliable way of gaining confidence that you’re getting a trustworthy service, especially if the recommender has been using this service for a prolonged period of time. However, knowing who has made the recommendation is important, as scam companies can pay people to write fake reviews online.

Finding finance companies on the high street is another alternative method as physical places often assure us more than their online-only counterparts. This is particularly relevant to the older demographic, therefore using companies based on the high street could be a good approach. Many people prefer talking face-to-face with staff as a way of building trust, so this approach could be beneficial for you.

Industry magazines are an ideal, and probably one of the most trusted, sources of information for finding legitimate finance companies. Industry experts will compile a list of companies, giving confidence in discussing financial details with knowledgeable, reputable staff. Good examples of these magazines include MoneyWeek, Broadcast, Fortune, and Public Finance.

The previous methods are all alternative approaches, but the most common approach in the modern day will always be the internet. Organic search engine rankings are normally a good indicator of trustworthiness; those higher in the rankings are the most relevant and statistically most viewed. Adding a location in your search will show you the finance companies that are geographically closest; this will perhaps show you familiar names, building trust. Yes, as mentioned before, the internet can be ideal for scammers - but if you know the positive signs to look for, you’ll find yourself staying well-clear of dodgy sites and instead coming across those with trust and authority, such as Union Business Finance.

Positive Signs of Credibility - What to Look Out For

When finding a legitimate finance company, there are several things to look for that will tick confidence boxes. These are tailored particularly to online sources, helping you filter between the good, the bad, and the uncertain. Once you’ve found a company you can fully trust, you can start unlocking financial doors of possibility. Some of the most important things to look for are the following;

Regulatory Compliance

Check if the finance company is regulated and licensed by relevant financial authorities, such as PCI DSS (The Payment Card Industry Data Security Standard), which helps “protect the people, processes, and technologies across the payment ecosystem to help secure payments worldwide” (PCI Security Standards). Regulatory bodies help ensure that financial institutions adhere to industry standards and protect consumers; if a company abides by this, that’s a good indication that it can be trusted.

Legal Compliance

Ensure that the finance company complies with all relevant laws and regulations; regulatory bodies such as the Financial Conduct Authority (FCA) are important to look for, as they help regulate the conduct of businesses - almost 45,000 of them, in fact. Be cautious if there are indications of legal issues or non-compliance, as this is a large red flag.

Reputation and History

The reputation and history of a financial institution go a long way in indicating whether it can be trusted or not. Research a company’s reputation by looking at independent ratings from other websites (preferably trusted websites), customer reviews, testimonials, and also word of mouth, as mentioned earlier. The history of a company can be found online too, so look at when they were formed and if they have been involved in any controversial activities; older companies are often more trusted, as scam companies often pop up in the short term.

Financial Stability

Since finance businesses operate by providing financial support to customers, the last thing you want is to be involved with a company that isn’t able to provide the funds you need. Publicly traded companies have financial statements that you can review online, such as AnnualReports.com, for example. For privately held companies, you may need to rely on third-party financial analysis or credit rating agencies.

Transparency

Here at Union Business Finance, transparency is one of our core values, as it is very important in building confidence in a finance company. Trustworthy finance companies are transparent about their terms, fees, and conditions; read through the company's terms of service, privacy policy, and any other relevant documents to understand how they operate.

Customer Service

When searching for a reputable and legitimate finance company, evaluate the quality of customer service available. A reputable finance company should have responsive and knowledgeable customer support to assist you with inquiries and concerns, which is particularly beneficial if you have concerns over the legitimacy of a company.

Security Measures

All financial institutions online should have secure services to protect card details and transactions - this is a must. Look out for features such as encryption, dedicated hosting, secure login processes, and other security certifications, such as Secure Sockets Layer certificates (SSL).

Clear Communication

Trustworthy finance companies communicate clearly and openly with their clients, ensuring that all questions are answered; which ties in nicely with customer service. Be cautious of companies that use high-pressure sales tactics, make unrealistic promises, or withhold critical information, as these are all red flags and should be avoided.

Online Reputation and Reviews

Online reviews can provide valuable insights into whether a company has a good reputation. However, there is also a risk to be aware of. Sadly, not all online reviews can be trusted.

For example, despite it being against most companies Terms and Conditions, it is possible to buy reviews. For example, each month there are an estimated 239k searches in the UK alone for “buy Trustpilot reviews”! Similarly it’s possible to fake reviews on Amazon.

For this reason, we recommend you don’t base your decision on reviews alone. However they can still be a useful tool to identify common trends (both positive and negative), and to provide some insights (e.g. a company with reviews vs a company with none).

We’re proud to say that we our Google Business Profile currently (at the time of writing) has a 5* rating based on 121 reviews over the last few years.

Referrals, Recommendations and Memberships

Relating strongly to word of mouth, referrals from family, friends, or colleagues who have had positive experiences with finance companies can be a strong way of building trust and gaining insight into the institution. If a business is a member of an industry-associated group, this may indicate that they adhere to legal, professional, and ethical standards and practices.

Watching Out for Red Flags

Having read through the positive signs of credibility, it is important to cover the red flags in more detail, even if some have been touched upon previously. Being able to spot warning signs early on will save you potential money loss in the long run, and in turn point you in the direction of trusted companies instead. We will look into these red flags in more detail below;

• Unsolicited Offers - Finance companies do not usually reach out to individuals without their request first, so be cautious of unsolicited emails, phone calls or messages.
• Requests for Large Upfront Fees - Be switched on to businesses that request large upfront fees before providing any sort of service. Legitimate companies usually deduct fees from the services they provide, as opposed to upfront payment.
• Promises of Guaranteed Returns With No Risk - If a company does this, it is a large red flag. All investments carry a certain level of risk, so unrealistic promises of guaranteed profits may indicate a scam.
• Missing Physical Addresses - A legitimate finance company will have a physical address and contact information provided, giving you a clear point of call. You should be sceptical if the company only provides a P.O. Box or lacks a verifiable location, a major red flag.
• “Too Good to Be True” - Like most things, if it seems this way, it most likely is.

Wider Support - What to Do

Finance solution companies have a duty of care to adhere to. Here at Union Business Finance, we have a great interest in protecting all users, regardless of whether you opt to use us or not. We are a trusted and credible business, but unfortunately, many are not. By being careful in selecting a finance company to work with, and paying attention to the signs of credibility and red flags, you give yourself the best chance of finding the right company for you and your financial needs. If you find yourself in a position of uncertainty, talk to us, or others around you in the business world; nobody wants to fall for a scam, so communication with your network of family, friends, colleagues, and other professionals can help reduce your chances of being a victim of a scam.

Choose a Finance Broker You Can Trust

At Union Business Finance, we know the importance of being transparent with our customers; ensuring that our customers feel safe and secure is a priority. Contact us today and we’ll happily address your concerns, providing you with the best financial solutions.