Give Him a Try. “He’s a Good Guy”

He may be a good guy, but does he pay his loans on time? The infamous, he’s a good guy line circulates in this business daily. Citing what an admirable individual they are should require a bit more verification than that. And trusting a reliable source in the industry may not always unfold the way it’s supposed to. Therefore, is pushing for a merchant, company, or any party based solely on personal traits enough to create a depiction of who they are?

“This phrase is interesting in that it often serves as a shortcut for assessing the character of a person or company in the industry, and its prevalence is understandable given the amount of trust that is necessary for successful financial transactions,” said Tony Borchello, General Manager at Finance It Forward. “At the same time, this phrase should not be taken as a full assessment of someone’s character or a complete substitute for due diligence. While it can be helpful in certain contexts, relying too heavily on this phrase can lead to bad investments or other costly mistakes.”

Ultimately this phrase is not meant to be negative, but one’s relationship with a person or company may not replicate the experience for someone else. Finding great partners in the industry plays a role in this too. Without building credible connections to be used for future references, it can be difficult to take anybody’s word.

“You always have people on the outside that are looking out for each other in this industry, which is great, don’t get me wrong,” said Amanda Kingsley, Director of Marketing and Development at Merchant Marketplace. “But everybody is so quick to just use that one phrase to make it seem like ‘Oh he’s a good guy,’ okay I’ll trust you. I’ll do it because you said that.”

Key words are useful to look out for as well when relying on a reference. For example, “promise” may not have the impact intended, Kingsley described. If someone is promising to pay back a loan on behalf of another person, it could actually heighten the risk of it falling through.

“As soon as you hear the word promise, you know that they’re going to break a promise,” said Kingsley.

A person’s credibility in the business should not justify an automatic approval all on its own. While referrals are an obvious and necessary part of the business, doing a thorough examination on the backend is key.

“It’s important to remember that ‘He’s a good guy’ should not be the only factor that’s considered when making a financial decision,” said Borchello. “Instead, this phrase should be used in conjunction with other sources of information such as research, reviews, and interviews, in order to get a more complete picture.”