Disadvantages of Borrowing Money From Friends and Family
Some people tend to lean on friends and family when their daily budget gets tight. Our families and friends are reliable in these situations; however, everything changes when it comes to a larger amount of money. Some people choose to get their SME loan from their friends and family in Singapore rather than applying to an SG money lender or moneylender institution.
Here are the risks of borrowing a large amount of money from friends and family for your business:
- They May Not Lend You The Right Amount of Money
Your friend and family may afford to lend you a larger amount of money but are reluctant to because they don't understand your business. When applying to an SG money lender or moneylender institution for an SME loan in Singapore, they may require you to submit a business proposal. You can explain to them how much and why you have the money for your business. A flawless business proposal will land you the right amount of lent money.
- Lack of Legal Protection
The only bearing you have from borrowing money from friends and family is a verbal agreement. The lack of legal protection opens a leeway to modified payment plans and abrupt changes in terms and conditions halfway through the loan. The best money lender in Singapore offers legal and binding agreement to protect both parties.
- Social Awkwardness and Discomfort
Sometimes, because friends and families consider you as kin, they may lend you some money for the sake of relationship and brotherhood despite being uncomfortable and reluctant with the situation. It causes friction between relationships and leads to social awkwardness.
- Power Disputes
Some people exert control in your life because of the debt. They may scrutinise your way of spending, lifestyle, and even your business's direction. The best money lender in Singapore does not meddle with your decisions.
Get an SME loan in Singapore at Apply Loans SG. Apply Loans SG provides the best and licenced money lenders in the country to help entrepreneurs build their businesses. Visit Apply Loans SG today.
