How an entrepreneur cum Uber driver failed the ‘truth test’ and lost a valuable opportunity
In October 2021, we had the chance to work with a young entrepreneur, who, like most we have seen over the years, was filled with passion, and a sense of can-do. The transaction required YieldRock to provide financing to purchase an additional vehicle for the purpose of expanding his Uber fleet. Albeit the business was duly registered as a logistics business, it only existed on paper, as his current vehicle had a lien against it by a garage he owed, according to him, a hire purchase transaction of sorts. Following our due diligence and some paperwork, we advanced credit to procure the new vehicle and took an equitable charge (collateral) in the car he was currently driving. Long story short, the customer defaulted on the first installment payment, with an untenable excuse of being involved in an accident. Unfortunately, other unpleasant disagreements emerged that necessitated the intervention of our sector regulatory body. When all was said and done, we recovered the full amount, including penalties and then we truncated the relationship.
Lesson: Trust, but verify, always verify