It doesn’t matter if you are starting a business or looking to expand your current operation, there may come a point when you require capital.

While there are many ways to secure the funding you need, many business owners take the path of least resistance. Unfortunately, this can lead them toward a relationship with a loan shark.

Here are three of the main reasons why a loan shark relationship is bad for business:

• Lack of a formal agreement. Sure, a loan shark is willing to lend you money without much paperwork or documentation, but this can come back to haunt you in the long run. It’s much better to secure funding from a reputable lender that will require the signing of a formal (and legal) agreement before handing over the money.
• High rate of interest. At what cost are you willing to borrow money? No matter how badly you need the cash, it’s important to realize that a high rate of interest can actually hold you back over the long run. Loan sharks don’t offer loans at a low interest rate. This isn’t the way they do “business” so you shouldn’t expect it.
• More stress than necessary. Borrowing money has a way of adding stress to your life. This is even more so the case with a loan shark, as you know that missing a payment or attempting to renegotiate terms could result in a serious (and often dangerous) situation.

You want what is best for your business at all times. For this reason, you should never consider accepting money from a loan shark. No matter how good of an idea it appears, you don’t want to give in and travel down this road. There are other more reputable ways to get the money you need.

What are your thoughts on doing business with a loan shark? Do you have any personal experience with this? Share your advice in the comment section below.

Loan sharks are skilled at making their “deal” look like the best of the best. For this reason, many people continue to move down this path when they need funds, such as to keep their business afloat.

However, once you realize the real cost of a deal with a loan shark, you will come to find that this is never a good idea.

Let’s take a look at three reasons why you should avoid these types of “lenders” at all costs:

• High interest rate. Sure, you can get the money you need without much (or any) paperwork, but in the long run this will cost you. Here’s why: loan sharks charge a crazy high interest rate as a means of making money in a hurry.
• With a traditional lender, you know that you’re working with a legitimate operation. If you have questions, they’ll have answers. If you run into trouble paying back your loan, they may be able to help. None of this can be said of a loan shark. Instead, the stress associated with this type of transaction will always be hanging over your head.
• You never know what’s next. Loan sharks are unpredictable. Once again, this is due to the fact that they are not regulated. For this reason, they can do pretty much anything they want – even if it’s illegal. When you never know what’s coming next, it can be a challenge to live your life.

So, there you have it. These are a few of the points that should help you better understand the real cost of a deal with a loan shark.

Do you have experience borrowing from a loan shark in the past? How did things play out? What advice do you have for others who may be thinking about this? Leave your comments and personal advice in the comment section below.

Do you find yourself in need of quick money? Maybe you’re in a bad financial spot as the result of a job loss or illness. Or maybe you’re seeking cash in an attempt to keep your business afloat.

Regardless of your situation, there are a few places you can turn. Since you’re in a hurry, some options, such as a bank loan, may not suit you. For this reason, you may immediately turn your attention to two other options:

• Credit card
• Loan shark

While it’s never a good idea to run up a large amount of credit card debt, it’s always better to choose this strategy as opposed to “doing business” with a loan shark. Here are three reasons why:

• Credit card companies are reputable. With a credit card company, you know you’re working with a legitimate and reputable operation. The same cannot be said about a loan shark.
• Lower interest rate. Even if you have a high interest rate credit card, it’s safe to assume that the rate will be lower than what you would secure through a loan shark.
• For example, you can pay a small minimum payment each month if necessary. Along with this, you may have the opportunity to transfer your balance to a zero percent credit card in the future. None of these things come into play if you borrow from a loan shark.

With all this in mind, you should have a better idea of why it makes more sense to choose a credit card than a loan shark.

Racking up credit card debt may not be your idea of a sound financial move, but this is always preferred over taking money from a loan shark.

On the surface, there are many reasons to do business with a loan shark. You can secure funding in a hurry. You don’t have to complete a lot of paperwork. The “lender” will tell you everything you want to hear.

Of course, if you continue down this path, you could soon find yourself in a bind.

Rather than opt to do business with a loan shark, you’re better off considering one of many other options. With a variety of benefits and flexible features, a personal loan is something to consider.

Here are four reasons why this is one of the best alternatives to a loan shark:

• Zero fees. This may not hold true with every lender, but many don’t charge origination fees. Furthermore, they charge no other fees as long as you continue to pay on time.
• Fixed rate. Forget about your payment changing from month to month. With a fixed rate loan, you’ll always know how much you owe.
• Flexible repayment term. Are you interested in a 36 month loan? How about 84? What about something in between? You have many options.
• The amount of money that you need. Depending on the lender, you may be able to borrow up to $35,000 (or more).

Along with the above, there’s one last thing to note: some lenders are able to provide an instant approval (or denial). This allows you to get a better idea of where you stand, all without the wait.

In many ways, a personal loan is similar to one from a loan shark. The one main difference, however, is that you’re completing the transaction with a reputable lender who has your best interests in mind.

What are your thoughts on securing a personal loan? Is this something that could improve your finances?