Why I’m Moving My Column from Inc to 21 Hats

Ami Kassar at an Inc. 5000 event.

I don’t want to be associated with brands that promote alternative lenders. I’ve seen what happens when businesses take fast-approval, high-interest-rate, online loans only to get caught in a debt trap.

By Ami Kassar

Have you ever met an entrepreneur or small-business owner in a cash flow pinch? Unfortunately, I understand these situations all too well. Faced with fear and anxiety, many entrepreneurs turn to the internet, where “alternative lenders” offer them loans or advances with the money promised to land in their bank account in 24 to 48 hours. Often, entrepreneurs think their problems are solved and jump on the offer.

Sadly, though, in most cases, they have just locked themselves onto a high-speed, high-interest-rate treadmill that can be impossible to escape. These online financiers typically demand rapid repayment and daily withdrawals from their accounts. Then, as the cash flow pressures mount, more lenders start calling with “enticing” new offers to give them some extra runway. Before long, the borrowers are in over their heads.

I have repeatedly seen the impact of these loans and advances at my company, MultiFunding, which I started almost 13 years ago. MultiFunding’s mission and purpose is to help entrepreneurs find the best loan options and alternatives to help them grow and stay in control of their businesses. We have learned that SBA-backed products are often the best solution, and we leverage this program in about 95 percent of our work.

When a business owner calls us in a cash flow pinch, we do everything we can to steer them away from these loans and advances. Instead, we encourage them to look at payables they can stretch or expenses they can cut. With proper counsel and support, there is often a better option than the alternative lenders. We also regularly get phone calls from business owners and entrepreneurs already caught in a debt trap. At that point, it’s often too late, and there is nothing we can do to help. It’s heartbreaking because the problem never should have gotten that bad.

That’s why I find it infuriating when well-established, small business brands align themselves with these lenders. If you say you are a friend of entrepreneurship and small business, you should practice what you preach. Too often, companies that serve small businesses and entrepreneurs in various industries peddle high-interest, fast-payback loans and merchant cash advances to their clients in exchange for lucrative referral or placement fees.

For example, like many of you, I am a QuickBooks user. But my blood boils every time I get an offer from its “finance center,” encouraging me to take expensive short-term financing that I don’t need. Similarly, we use Keap, formerly InfusionSoft, as our CRM. The company regularly promotes a lender called Fora Financial, which is in the short-term lending game. And I couldn’t believe what I was reading when I learned that Amazon recently announced a partnership with a merchant cash advance lender.

For me, the last straw was when Inc., where I have written a column for eight years, recently published its inaugural Power Partner Awards, offering its readers a “seal of approval for B2B companies that you can rely on.” The feature indicates that Inc. did deep research—”we are journalists after all”—to pick reputable, reliable companies that business owners can trust.

In the Finance category, several of Inc.’s Power Partners actively and aggressively promote short-term, high-interest loans that often come with merchant cash advances and annual percentage rates north of 50 percent. These companies include Forward Financing, National Business Capital, and Rok Financial.

I don’t believe that those kinds of loans serve the interests of business owners and entrepreneurs, and I don’t want to be associated with a publication that does. So I have resigned from my Inc. column.  And I published a letter on the internet to Joe Mansueto, the owner of Inc. and founder of Morningstar, asking him to have his editors remove these companies from the list. (Please click here if you would like to read the letter.)

And now, I am proud to join Loren Feldman and 21 Hats. This decision might cause some folks to scratch their heads and wonder why. Why would I move from an established entrepreneurship publication to a small, scrappy start-up trying to get off the ground?

Serving small business owners and entrepreneurs is my life’s purpose. Building a business is brutally tricky work. You must be tenacious, stubborn, visionary, obstinate, and maybe even crazy. There will be landmines at many places along the journey. And when you think you’re in the clear, another obstacle will appear. I will no longer associate myself with any publication or company that supports these landmines. (My first step is disassociating myself from Inc. magazine. Quickbooks and Keap will take longer for me to unwind.)

I am thrilled to join Loren on his mission to build a community where small business owners and entrepreneurs can compare notes, share their wins and losses, and learn from each other. Loren and I have known each other for more than 10 years and have worked together many times. I wrote for his New York Times small business blog, You’re the Boss. I was a frequent guest on his SiriusXM radio show, Mind Your Business. And I’ve been a recent guest on his 21 Hats podcast (“Fire Your Franchise Consultant” and “What Type of Entrepreneur Are You?”).

I’ve seen that 21 Hats is focused on providing valuable content to help entrepreneurs through this journey and share valuable lessons. As a result, its followers can sleep well at night, knowing that the publication has their best interests in mind.

I look forward to focusing my column on growth and financing tips—and the lessons we learn along the way. I aim to help business owners and entrepreneurs think about growth and risk and explore the choices between debt and equity. If you have any questions or suggestions about topics you would like to see covered, feel free to reach out.

Ami Kassar is the founder and CEO of MultiFunding.

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