As a small business owner, there may come a time when you need to raise capital. There are many ways of doing so, all of which you need to consider.

Unfortunately, some people begin to believe that a loan shark is the best option for them. As a result, they move in this direction, just to realize soon enough that it was a mistake.

There’s nothing wrong with wanting to grow your business. Conversely, you need to be smart about the financial decisions you make. Here are three reasons why you should avoid a loan shark, and instead opt for a more traditional method of borrowing money:

1. The Interest Rate

Nobody wants to pay interest on a loan, but this is something you’ll need to get used to if you’re borrowing money.

The problem with a loan shark is this: the interest rate is above and beyond anything you would reasonably expect from a bank. As a result, the cost of borrowing is much greater.

2. Trouble if you can’t Pay

There’s no denying the fact that you have every intention of paying back your loan in full and on time. However, if for some reason you miss a payment or slip behind, you don’t want to be working with a loan shark.

As a “lender” with no regulations, you could find yourself facing a variety of intimidating collection tactics.

3. No Financial Benefits

When you use a business credit card, when you take out a bank loan, it can help build your company’s credit and boost your credit score.

With a loan shark, this never comes into play. Sure, you can access the money you need, but it’s not helping you advance your financial standing in regards to your credit.

If you have dreams of growing your business, don’t get too far ahead of yourself. Take your time, consider your options for borrowing money, and then make an informed decision.

Despite the fact that “doing business” with a loan shark is risky, many people feel that they have no other option.

If you’re in need of money in a hurry, it’s easy to believe that a loan shark is the right answer. And while this may be true in terms of the timeline, there are entirely too many risks to get involved.

Here are some of the top reasons why borrowers turn to a loan shark:

1. They’re in a hurry. As noted above, people who want money fast often turn to a loan shark as opposed to considering other ideas. Even though the money may come faster, you won’t be happy with the arrangement over the long run.
2. They were denied a loan by a traditional lender. If this happens, here’s the one thing you need to remember: there are more banks out there. Just because the first lender turns you down doesn’t mean this will hold true across the board.
3. They aren’t aware of other options. Let’s assume a bank has turned you down multiple times. Rather than immediately turn your attention to a loan shark, it’s better to look into other options. Why not ask a family member for a loan? Why not apply for a credit card? These ideas are better than getting into a relationship with a loan shark.

All in all, there are many reasons why people think they have to turn to a loan shark. If you find yourself thinking about this, take a step back and look at your other options before you do anything else.

Once you find a more reputable lender, you’ll feel better about what the future will bring.

I’ll never be approved for a traditional bank loan. It takes too much time to complete an application. Nobody will give me money with my credit.

Do any or all of those statements sound familiar? If so, you may have uttered them to yourself over and over again in the past.

Unfortunately, when people begin to think this way they often end up turning their attention to a loan shark. They begin to believe that this is there only option for borrowing money.

As tempting as this may appear on the surface, it will put you in a worse position in the long run.

Here are three reasons why there’s no time for a loan shark in your life:

1. A Big Risk

Sure, you may be able to receive the money you require, but you are taking a big personal and financial risk along the way.

Doing business with a loan shark can be extremely dangerous, especially if you are unable to repay the money on time.

2. High Cost of Borrowing

There’s no denying the fact that you pay interest on a loan you take from a traditional lender. However, when compared to the interest charged by a loan shark, you’ll soon realize just how fair this is.

When you take money from a loan shark you will find that the cost of borrowing is staggering.

3. No Regulations in Place

Borrowing from a reputable lender gives you peace of mind. You know that there are regulations in place to keep both parties safe and secure.

Can the same be said for a loan shark? Absolutely not. They play by their own rules, which never benefit you and your money.

Conclusion

These are just a few of the many reasons why you shouldn’t make time for a loan shark in your life.

Can you think of any others to add to the list?

Is your business in search of funding? Do you require money for personal reasons? If so, you know that there are many legitimate options out there. You also know that some of these may not work for you at the present time.

At some point, you may begin to wonder if a loan shark is your only option. These “lenders” make it easy on people to borrow money, which is why so many continue to think this scenario is right for them.

Here are some of the most common reasons to believe that you need a loan shark:

1. You are in a hurry. Although you may be in a rush to secure funding, it doesn’t mean you have to opt for a loan shark who doesn’t have your best interests in mind. You can work fast by considering a variety of other options, such as a loan from a family member or friend.
2. You have been denied by a bank. Let’s face it: there are times when banks just don’t want to do business with borrowers. If you find yourself in this position, it’s not time to jump the gun and find a loan shark. Instead, you should continue to search for a lender that is willing to give you a loan. Broaden your search and you may be surprised at what you find.
3. Nobody else understands you. This is the oldest trick in the book. Loan sharks want you to believe they are the best choice. They want you to believe they understand everything about your situation. And once you agree to borrow from them, everything changes. At that point, you’ll finding yourself drowning in a high interest rate among other issues.

Although you may think there are good reasons to do business with a loan shark, this is never true. Do yourself a favor and only consider legitimate options. This will give you peace of mind, regardless of why you are borrowing money.

You are in the market for a loan. You know you have options, but don’t know what to do next. And then a loan shark approaches you. What they are offering may sound too good to be true – and it is.

If you come in contact with a loan shark, it’s important that you take the right steps towards avoiding a bad situation.

Here are three things to do if a loan shark approaches you:

1. Background work. Do your best to learn more about the lender. This will help you better understand what they are offering, where you fit in, and how to move forward. If you think a lender is a loan shark, you are probably right.
2. Say no thanks. You don’t want to let the lender think you are interested. It doesn’t matter if you are contacted online or via phone, say no thanks and move on to find a lender that has a better reputation.
3. Make a mental note. What was the name of the lender? What did they say to you? What was their contact information? You should make a mental note of all these details, as to avoid doing business with the organization in the future. Furthermore, this may help you save somebody else from a bad situation down the road.

These are just a few of the many things you can do if a loan shark approaches you. Rather than consider their offer, take these steps and move on. It’s the best thing you can do for you and your money.

What other steps would you take if a loan shark approaches you with an offer? Share your thoughts in the comment section.

There is a lot of advice out there in regards to borrowing money from a loan shark. Even so, here is the best thing you will ever hear: don’t do it.

If you avoid doing business with an unlicensed lender, you never have to concern yourself with what could happen.

Could it really be that bad? The short answer is yes. It’s easy to talk yourself into thinking that borrowing from a loan shark can’t be that bad, but you may be surprised at how it turns your financial situation upside down.

If you decide to borrow from a loan shark, it could lead you to one of these situations:

• A loan that has extremely poor terms, such as a high rate of interest.
• Harassment from the “lender” if you fall behind on your payments for any reason.
• Pressure to borrow more money from them as a method of repaying one debt with another loan.

Do you really want to find yourself dealing with one or more of these situations? You may be in a crunch. You may need to secure money in the near future. Even so, it doesn’t mean you should opt to do business with a loan shark. This one bad decision could put you in a difficult financial spot for the foreseeable future.

There are enough licensed and legitimate lenders that you should never think twice about forming a relationship with a loan shark. Forget about this and contact a local lender you can trust. This will put your mind at ease, both now and in the future.

You know how the old saying goes: if it is too good to be true it probably is.

Even though these words of wisdom are dancing around your head, it doesn’t mean you always listen to them. This is particularly true when it comes to financial decisions.

If you believe a loan is too good to be true, there is a very good chance it is. Not only that, but you could find yourself closer than ever to getting into a relationship with a loan shark. Is that a risk you want to take?

Here are three ways to tell if a loan is too good to be true:

1. You are not asked to complete much paperwork. Let’s face it: traditional lenders require that you fill out quite a bit of paperwork, while providing a variety of documentation. If this is not asked of you, something is wrong.
2. The lender is willing to give you as much money as you want. This should be a red flag, as most lenders will not hand over money just because you ask for it. You need to show that you are qualified. This is based largely on your financial standing, collateral, and credit score.
3. You cannot find any information on the lender. A basic online search should help you learn more about a lender, including expert and consumer reviews. If you cannot find any of these, something is wrong. The lender is not legitimate, but may instead be considered a loan shark.

When a loan is too good to be true, it’s best to step back and understand what is going on. You may soon find that a loan shark is targeting you. Moving forward is a mistake on many levels. There are enough legitimate lenders that you don’t have to go down this path.

There is a big difference between the ability to spot a loan shark and actually avoiding this type of “lender.”

Those who are unfamiliar with the pitfalls of loan shark borrowing often find themselves considering this arrangement. Acting on this could be one of the biggest financial mistakes you ever make, either from a personal or business perspective.

Here are some of the many pitfalls associated with loan shark borrowing:

1. High interest rate. Hands down, this is one of the first things you will recognize. Loan sharks don’t care what traditional lenders are doing. They set their rates extremely high, as this puts them in position to make as much money as possible.
2. Lack of organization. Loan sharks make it easy to get a loan. This is why so many people consider this alternative to traditional lending. The problem with this is that these so-called lenders don’t have the organization and structure necessary to lend money in the appropriate manner.
3. Danger, danger, danger. That is exactly what should be going through your head as you contemplate an agreement with a loan shark. It doesn’t matter what type of loan you are seeking, you should only consider a relationship with a reputable lender. Anything else is extremely dangerous, as loan sharks have a bad reputation for using scare tactics (or worse) to get what they want.

Borrowing from a loan shark is typically easier than securing a loan from a traditional bank. Of course, this comes at a cost. The pitfalls above should be more than enough to scare you away from this financial decision.

Can you think of any other reasons to avoid loan shark borrowing at all costs?

Do you find yourself seeking a reputable lender for a business loan? Are you ready to secure a loan, but unsure if you are making the right decision?

One of the most difficult decisions you will make is deciding which lender to do business with. This is especially true in today’s day and age, as you have many options to choose from.

If you have concerns about making a poor decision, if you are concerned you may end up borrowing from a loan shark, you are not alone. Fortunately, there are things you can do to avoid trouble.

Here are three ways to spot a loan shark in 2016:

• Lack of paperwork. Loan sharks don’t typically deal with all the paperwork and documentation of a traditional lender. If somebody offers you a loan but doesn’t request much or any information, something is wrong.
• High interest rate. Loan sharks make money by charging a high interest rate on all loans. They may make it easier to secure a loan, but you are definitely going to pay for it in the long run.
• Poor or no online reviews. In today’s day and age, the most reputable lenders have nothing to hide. There are plenty of online reviews detailing what they offer. With a loan shark, it is likely you won’t be able to find any information on them.

If you need a business loan but have concerns about making a sound decision, don’t rush into anything. You should only sign on the dotted line once you are 100 percent sure that the lender has your best interests in mind. This means one thing: you must avoid loan sharks at all costs.