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The Consequences of Neglecting Your Funder Relationship: A Cautionary Tale

In the world of business finance, every action (or inaction) carries a consequence. While building a strong relationship with your funder can yield numerous benefits, neglecting this relationship can have serious repercussions. At Velocity Capital Group, we always advocate for open communication and honoring commitments. But what happens when merchants stray from this path?


Let's explore the potential consequences of not upholding your end of the deal with your funder.


1. Additional Fees - The Financial Burden Missing payments isn't just a breach of your agreement; it can also lead to added financial strain. Late or missed payments often come with additional fees, increasing the overall amount you owe. Over time, these can compound, turning a manageable debt into a mounting financial challenge.


Tip: Always prioritize your payments. If you foresee any issues, communicate them proactively to avoid unnecessary fees.


2. Collections Calls - The Stressful Reminder When payments are consistently missed and no communication is established, funders like Velocity Capital Group may resort to involving the collections team. These calls can be stressful, intrusive, and a constant reminder of your financial obligations.


Tip: If you start receiving collections calls, it's crucial to address the underlying issue immediately. Ignoring them won't make the problem go away.


3. Legal Action - The Ultimate Repercussion Persistently neglecting payments and failing to communicate can lead to the most severe consequence: legal action. Lawsuits not only entail potential financial penalties but can also harm your business's reputation and credit standing.


Tip: If you're ever served with legal action related to your financial obligations, seek legal counsel immediately and work on resolving the issue with your funder.


Navigating the Choppy Waters While the consequences of neglecting your funder relationship can be severe, it's essential to remember that most funders, including Velocity Capital Group, prioritize building positive relationships with merchants. Our primary aim is not to penalize, but to partner. Open communication is often the key to avoiding these pitfalls.


The journey to financial success in business is a two-way street. While funders provide the necessary capital to fuel growth, merchants must uphold their commitments and maintain open channels of communication. Failing to do so can lead to a cascade of consequences, from financial penalties to legal woes.

Always remember: In the realm of business finance, transparency and trust are paramount. Let's ensure we uphold these values for a prosperous future.


Tread wisely and prioritize your commitments!

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