Scams business loans: how to understand if an online service is safe or is it a scam?


If you are looking for a loan of any kind it is always good to pay close attention to the scams, even more so when it comes to business loans. In this article we will find out how to understand if an online service is safe or if it is a scam.

Scams business loans: when it is good to stay away from some lenders?

Loans between private individuals are undoubtedly an excellent opportunity when you are looking for a certain amount of money to deal with any type of expense. This form of financing very often turns out to be cheaper than the classic personal loans, but you have to be very careful about the scams. In fact, loans between individuals usually provide less restrictive requirements for the request than those that we can find on the regulation of loans offered by the main banks and financial institutions. For this reason we are talking about a form of loan that is chosen by many potential customers who are denied financing by several lenders. Unfortunately, some people are ready to take advantage of the “desperation” of those who need a certain sum of money, and it is precisely for this reason that in this sector it is good to pay close attention to those who turn to us.

As far as classic personal loans are concerned, everything is simpler. Turning to a credit institution will be enough to check that this is authorized to provide loans to customers, and in this way we will be sure not to be scammed. In the case of business loans, on the other hand, everything is more complicated because any person with a certain amount of capital to invest can choose to offer a loan. How to understand if we are faced with a scam? It is important to stay away from certain lenders, and from our experience in the field we can give you some tips to identify those who want to cheat. To avoid being cheated, it is important to know how this type of financing works. Although this is a loan different from that provided by banks, the methods of requesting and disbursing are practically the same.

It is good to emphasize this aspect because sometimes private lenders, relying on the ignorance of some customers, define the rules to defraud the unfortunates. In particular, it has happened that some have been cheated by requesting a personal loan because the lender has asked them for an advance on the interest due. In practice, the applicant had to pay an interest amount before obtaining the required sum of money. Once the money was pocketed, the lender became unreachable by the client, who had therefore been the victim of a fraud. For this reason it is good to stay away from those who ask for interest in advance. For greater security when requesting a loan between individuals, our advice is to request it by registering to one of the different “social lending” communities. In this way you will be put in touch with thousands of lenders. The platform requires the right guarantees for both applicants and lenders, so that the exchange of loans is absolutely safe, just as if you were approaching an authorized credit institution.

How to understand if an online service is safe or a scam: watch out for interest rates!

Again with regard to loans between individuals, there are several online services that allow you to obtain the desired financing. But how can you tell if a service is safe or is it a scam? The first recommendation as we have said is to stay away from those who require any advance on interest. Another aspect to take into consideration is that of applied interest rates. The reason is always the same: one of the reasons why loans between individuals are chosen is the lack of alternatives. As a result, unfortunately, some lenders take advantage of this urgent need for money from the applicant to offer it at too disadvantageous conditions. In general it is good to know that in the event that the customer has little guarantee to offer it is normal that the economic conditions of the loan are not the best. However, it is good to pay attention to the scams because above a certain limit for the interest rates a loan is considered illegal.

The Italian law in fact defines very precise rules to identify those who want to cheat customers looking for a loan from individuals. Although this practice is 100% legal, there is a specific regulation to which all lenders must comply. The crime that can be pointed out to a lender is that of usury, for which even rather harsh sentences are foreseen. For lenders who set interest rates defined as usurious, there is a period of imprisonment ranging from 2 years to 10 years, and a fine ranging from 5,000 euros to 30,000 euros. How to identify a loan shark and therefore a scam? The anti-usury law sets the thresholds that can not be exceeded for each financing option that can be accessed. In the case of business loans, the types of loans offered are mainly of two types: personal credit and finalized credit. With regard to personal credit, the usury threshold is equal to 16.51%, while in the case of loans for the purpose of loans, the maximum interest rate that can be applied by a lender is 15.45%.

However, it is not only this threshold that must be taken into consideration. If you have looked at the interest rates currently on the market you will have noticed that these thresholds are much higher. In particular, the average rate applied for personal loans is about 10%, while for the purpose of the loan it is 9.16%. A loan between individuals could be considered usurious even if the interest rate is too high based on the characteristics of the loan and the guarantees provided by the client. As you well know, in fact, the interest rate increases with increasing duration, and at the same time it will be higher in case of lack of certain guarantees. So if you think that the rate applied is too high for your financing, first we suggest you look elsewhere for an alternative solution to receive a loan. If you have already applied for this loan that you think is a scam, we advise you to proceed with the complaint.



This is how a business loan works

 Small and medium-sized companies play a major role in the Dutch economy. It is precisely those companies that contribute most to job creation and thus the prosperity of society. That is why we think it should be easy to apply for a loan. Loan providers  has the ambition to make it easier for the entrepreneurs to get financing that they deem necessary to achieve their next success.

1. Application

Application takes one minute. Your application is not binding.

Respond to the request

You will receive an answer to your loan application within one hour.

3. Transfer

You sign the loan with iDIN and the money will be transferred the same day.

This way you create credit for your company

It is no longer self-evident that entrepreneurs can take out a business loan. Several banks and lenders consider various factors when they make a decision about offering a loan. Below you can see which elements a bank usually goes through when considering a loan:

Important factors that affect the amount a company can borrow and the price  

People behind the company

Assessment of the person (s) behind the company is an important factor in risk assessment. Payment comments, debts, stable income, experience and credit skills are all factors that are considered.

Cash flow

Cash flow, the overview of business payments during a certain period. The cash flow is an important indicator for the loan provider to see how the liquidity of the company changes over time. A number of companies generate profits, but may experience problems by generating the majority of sales in a period, while most costs are incurred in the other periods.

Business plan

Do you have a business plan with a clear strategy and an implementation plan? Do you know what your customer segment is? Is your company dependent on a few customers? A good business plan takes into account general operating conditions and trends. Normally this contributes to creating a good feeling with the financier.

Experience or future

A company with a long history usually does not go bankrupt as often as newly started or “young” companies.

Control of the figures

That there must be control of the figures and that a good budget must be present is important both for you and for the bank. As mentioned before, cash flow is normally more important than the actual result. How much your company is indebted to lenders, how many employees are in the organization, what the company looks like, what the growth ambitions are, the details of what the company’s amount is wants to borrow. All these factors are taken into account before lenders approve an application or not.