Anyone have any experience with ABR Capital Funding out of El Paso? My parents are retired and considering investing some money with them. Apparently they loan money to government contractors who are approved for funding but waiting for payment and investors are paid 10% APR on their investment. They claim none of their investors has lost money in 25 years of business and they have an A+ rating with the BBB. On the surface it seems like a good return on a relatively low risk investment. Any thoughts on this type of investment? Any pitfalls to worry about? What say you experts of the B&I board?

Getting 10% per year in a "low risk" investment isn't real.

Am I reading that correct? BBB file was opened last month?

Having not done any research, this doesn't pass the smell test for me.

Always beware of someone selling a high return, low risk investment because they do not exist

The lack of historical losses is not necessarily an indication of lack of risk. It's possible investors to date have been lucky. Future losses may be materially different for any number of reasons

Long way of saying that I would be very skeptical. Make sure to do a ton of due diligence before considering an investment

10% for factoring Government Contracts seems to good to be true for me.

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Apparently they loan money to government contractors who are approved for funding but waiting for payment and investors are paid 10% APR on their investment.

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That's because these borrowing companies have (1) low on capital and liquidity (2) undertaken projects that are massive (3) have retainage might take years to pay out (3) litigation risk to the extreme.

Its very high risk and the fact that they claim its low risk should be enough evidence to walk away.

Thanks for the responses. It seemed too good to be true and now I have some arguments I can make to try to dissuade my parents from giving these people any money.

if they are paying 10% they are charging 2 or 2.5 that to their debtors. Doesn't seem a good way to have a lot of healthy government contractors going forward.