The small business borrower’s bill of rights is a document that outlines six fundamental rights that any small business owner who is seeking funding is entitled to. It was written by the Responsible Business Lending Coalition in 2015 and is signed by small business lenders, credit marketplaces and brokers who believe they represent the values that are outlined within the document. This blog post outlines the six fundamental rights in the document and illustrates our commitment to responsible lending practices.
1: The Right to Transparent Pricing and Terms
Talking about the cost of funding is confusing. The right to transparent pricing and terms explicitly states “A borrower has the right to have the cost and terms of any financing being offered presented to them in writing and in a form that is clear, complete, and easy to compare with other financing options, so that they can make the best decision for their business.” What Hatch can commit to is not only outlining the cost associated with borrowing from us, but also the thought process behind why we’re priced the way we are. Although regulations don’t allow us to advise you which loan option is the best one for you to take, we can certainly provide you with facts and information in order to help answer questions so that you can make the best decision for your business.
2: The Right to Non-Abusive Products
“A borrower has the right to expect that the financing products offered by a lender will not trap his/her business in an expensive cycle of re-borrowing.” We couldn’t have said it better ourselves! Our goal is to help you get your business off the ground while you build healthy financial habits. That may mean that there comes a time where you no longer have the need to borrow from us. We’ll take pride in your business operating without the need for additional financing, and can’t wait to help you get to that point.
3: The Right to Responsible Underwriting
Because our loans are amortized over a 5 year timeline, we believe that our minimum monthly payments will be low enough to keep cash flow more than comfortable for your business bank account. This right explicitly states, “A borrower has the right to expect a lender is offering financing based on underwriting practices that assess the ability of the borrower’s business to succeed and repay.” We request as much information as possible in order to get the best picture of your business. The more information from you that we have, the easier it becomes for us to stay true to this right. Additionally, we know that financial situations change over time. We will work with you to ensure that your repayment structure is comfortable for you as time passes.
4: The Right to Fair Treatment from Brokers
“A borrower has a right to honest, transparent, and impartial communications with a broker regarding loan options, conflicts of interest, fees and the financing options available.” Not only do we agree with this at Hatch, but we also want you to talk to an individual when it works best for you. We would like to add to this right, 4a: The Right to Speak to a Human Being. Money can be a scary thing. Lending can be complicated. We believe that the businesses that borrow from us should be able to reach someone over the phone if they have questions or concerns about borrowing at any point in their relationship with Hatch. We will commit to being as accessible as possible and partnering with small business owners to build trust.
5: The Right to Inclusive Credit Access
Simply put, this right is also the law. To us, equal treatment of individuals is not optional. “A borrower has the right to fair and equal treatment when seeking a loan including protections guaranteed under the Equal Credit Opportunity Act.” Please check out another blog post we’ve written on a comprehensive understanding of ECOA and your fundamental rights as a member of a protected class.
6: The Right to Fair Collections Practices
“A borrower has the right to be treated fairly and respectfully throughout a collections process and the right to protections like those guaranteed under the Fair Debt Collection Practices Act.” At Hatch, we will work with you to ensure you’ve made your payment on time. Although we don’t have penalties for late payments, we also want to make sure we’re helping you build good financial habits. We will have someone available to chat with you and work out payment plans in the event that you are feeling stressed by your monthly payment. We will commit to being honest and transparent with you throughout the whole process.