The Truth About Email Loan Offers for Startups and Businesses

Easy, One-Click Email Loan Offer for Your Startup or Small Business

Picture this: You are tight on cash and you get an email offering you cash—right now. A flat fee? Sounds great! No long paperwork, just cash you really need in your bank account. And you get it NOW. It’s easy to say, “Cash now? Sign me up!” But hold on—don’t click that link just yet.

That too good to be true email probably is too good to be true and it will likely look something like this.


Based on your business’s strong recent performance, you’ve pre-qualified for a new loan offer for Your Company, LLC of up to $105,100. You can use this financing for whatever your business needs, such as buying inventory, investing in marketing, or managing cash flows.

Here are the details:

    • Up to a $105,100 loan
    • $15,038 flat fee
    • 24.4% of sales go toward repayment

Your offer has increased based on information you’ve shared with XYZ Loan Company about your business. You now qualify for a larger loan amount with a higher repayment rate. View the offer to customize your terms.

View your offer

There’s no credit check or long application to fill out, and payments are made automatically through a percentage of your XYZ Loan Company sales. This offer is available until December 9, 2022. To learn more, visit our website or see our frequently asked questions. You can also reply to this email to get in touch.

—The XYZ Loan Company team”

Breaking Down a Loan Offer for Your Small Business or Startup

Ok, hold on. Let’s do the math on this “amazing” offer. $15,000 for $105,000 (~14% interest?). Doesn’t sound too bad right? Let’s dig in a little more… 14.4% repayment using your revenue… what does that mean? That means this company is going to take 14.4% of your revenue every month. In this example, the company has an average of $112k in revenue a month. So they would be paying back this loan in as little as 6 months.

I have evaluated this type of loan before and it’s always about a 6 months payback time frame. Why does this matter? That makes the effective annual interest rate 25%!! I’ve seen them up to 39% 🤯. That means if you hold loans like this for a full year, the loan company is actually keeping 1/4 of that money. To hold this loan for just a year, you’d be paying about $30,000. Doesn’t sound as cheap anymore does it?

Even in this interest rate environment, you should be able to get 7-9% from a bank. Yes, there will be more paperwork, but the interest rate is a lot lower and the payback period is typically longer. $15,000 for $105,000 will likely get you 3 years to use that capital rather than 6 months. This means the capital can be working in your business for much longer and the impact on your monthly cash flow is much smaller.

Now it’s also possible you don’t qualify for a normal loan (I get that), but there are alternatives to this kind of loan. If you are even considering this type of loan you need to consider expense cutting FIRST. Loans like this make cash even harder to find within your business because they suck up all of the cash that would have been profit to pay interest payments instead.

Diving Into Your Business’s Cash Flow and Revenue Opportunities

I know this one-click offer feels easy, but that’s just it—it’s too easy! And in this case, my client’s hesitation (and asking me to look into it) is 100% the right instinct. We may not be able to find $105,000 in their business overnight. But we can look at their cash situation, their expenses and their revenue opportunities and find a better way than this.

If it looks too good to be true even from a legitimate source, it probably is.