Take care to avoid unauthorised lenders - otherwise known as loan sharks. An unauthorised lender may give you quick access to credit, possibly without needing a business plan or security, but there may be drawbacks including unfavourable interest rates and loan terms.
To find out if a lender is licensed by the Financial Conduct Authority (FCA) you can search the Consumer Credit Register.
You may be dealing with a loan shark if:
- the salesperson is pestering you or is particularly pushy
- the interest rate is significantly higher than other lenders
- the company is reluctant to show you the loan terms and conditions
- you are asked to tie yourself into a longer-term contract than you need
You may also find yourself a target for loan sharks if you have a poor credit record and would normally find it difficult to raise finance. Read GOV.UK guidance on loan sharks.
For information on how you may be able to secure non-bank finance, see eight types of non-bank financial support.
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