What does loan sharking mean

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Think of sharks in the ocean that prey on their victims. They offer emergency loans to businesses with extremely high interest rates that will basically kill you. It is unfair, heartless, and exploitive but all they care about is to make a profit, and not about your failing business. Money sharks are able to operate because many companies need a cash advance to pay their employees or run their operations, putting them in a very tight spot.

It is very difficult for many small businesses to get a line of credit with traditional banks, and the process takes too long. High interest loans become a better and faster option to get the cash you need. In addition to the high interest, they tack on a lot of fees, many of them hidden fees, such as an underwriting fee. They also deceive the client of the true cost of the loan, for example they will tell you a lower rate and then you will find out that rate was for a short amount of time and the yearly interest is astronomical.

If you fail to repay your loan on time, there will be even more fees which threatens the long-term financial health of the business. Loan sharks suck money from their clients and enforce their fees aggressively or force you to take another loan to repay the money you owe. They are relentless, aggressive in nature, unrelenting and unforgiving, especially when it comes to default or missed payments. But not every high interest loan is a predatory loan, and not all lenders are loan sharks.

There are situations where a high interest loan can be the best thing you can do for your business. Many lenders offer high risk loans with a quick application and approval process. All the fees are open and upfront, and everything is explained clearly and done professionally. These loans are meant to be repaid in a relatively short period of time.

In this way, the business can continue to function during a growth spurt or temporary cash shortage or hardship or until they can obtain a traditional loan. From Wikipedia. Alternatively, the lender resorted to public shaming, exploiting the social stigma of being in debt to a loan shark. The loan shark could also bribe a large firm's paymaster to provide information on its many employees.

He turns to a loan shark for the money, but ends up in debt to him. Prosecutors say loan shark victims obtained home equity loans to pay off debts to their mob bankers. See all examples of loan shark. These examples are from corpora and from sources on the web. Any opinions in the examples do not represent the opinion of the Cambridge Dictionary editors or of Cambridge University Press or its licensors. Translations of loan shark in Chinese Traditional. See more. Need a translator?

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November 08,