Shelf corporations and business tradelines: A scam to avoid!

 

Wherever there is money involved, it is almost a given that there will be some mischief in space! It is inherent in the nature of money that not all want to earn it in the right way. Thus, in any financial sphere or segment, you will find a fair share of frauds and liars who promise you the moon but only flatter to deceive. If it seems too good to be true in the world of finance, then it probably isn't! We've been a part of this segment for a fair few years and have seen our share of fraudulent players. As for ourselves, we take pride in the fact that there is no wholesale shelf corporations scam in our mode of functioning! We have scores of clients willing to attest to that fact. This post will talk about a fraud that sellers of shelf corps perpetrate on buyers looking for a shortcut to business credit.

 

Tradelines are not the answer!

Shelf companies do not come with established credit, period! If someone promises you this, then stop interacting with them immediately. By definition, shelf corps offer a blank slate to investors and should not have a previous history. So, when a seller presents you such a proposition, you're acquiring an operational entity, and that requires another level of due diligence. If you have the money to go for an acquisition, why do you need funding in the first place? These are questions that you need to ask yourselves before investing in such a flawed idea. The reason why people fall for this scam is not hard to find. What does an entrepreneur need for the execution of a business idea? The answer is funding, and it is not readily available. The desperation of financing is a weakness that can be exploited quite easily by players who know what they're doing.

In this scam, the sellers offer potential buyers shelf companies with credit lines, trapping quite a few buyers into their trap. For these lines of credit, these vendors demand their pound of flesh. At that time, buyers think that a credit line is worth the asking price and making the payment without any issues. However, when they actually buy the shelf company, they realize that they have been cheated. We have seen cases such as a pre-approval letter from a friendly company being cited as a tradeline. When you examine the evidence, it is just an offer of real estate financing where you have to put in a lot as a down payment.

Find a reliable vendor!

The only way to avoid such frauds is to put in some time for research and understand the concept of shelf corps. You will begin to appreciate their qualities as well as their limitations. Then, find a trusted partner such as wholesale shelf corporations that can offer you a tailor-made solution. In many cases, we will also let you know the issues that you need to resolve before such a solution can be applied.