Don’t become a victim…

Illegal money lending is not only an issue for individuals, it can also pose a serious threat to businesses.

The England Illegal Money Lending Team (IMLT), also known as Stop Loan Sharks, has issued new advice to help business owners recognise the risks, avoid falling victim, and seek support if they have borrowed from an unauthorised lender.

For over 20 years, the IMLT has investigated and prosecuted loan sharks while supporting tens of thousands of borrowers. Some of those affected have been small business owners – around nine per cent of those supported in the first half of 2025 borrowed for business reasons.

To raise awareness, the IMLT has released a short video explaining how it can support businesses and where its remit does not apply. The video can be viewed here.

The risks for business owners

Loan sharks prey on those under financial pressure, offering quick loans with no paperwork. On the surface, these lenders may appear approachable, but the reality is far from it.

Once a business borrows from an illegal lender, they can find themselves subject to hidden charges, coercion and even threats if they struggle to repay.

The warning signs of an illegal lender include:

● High-pressure sales tactics, making borrowers feel rushed or obligated to take the loan

● No clear documentation or paperwork outlining terms

● Unclear or undisclosed interest rates and repayment conditions

● Possible requests for cash payments with no receipts or records

● Imposing longer-term repayment conditions than initially agreed

A real example

Paul, a 42-year-old business owner from Devon, borrowed £20,000 through what he thought was a legitimate money lending company to start a clothing business. When his business failed, repayment became difficult. Without any formal signed paperwork, he was threatened, told his debt had been

‘sold on’, and pressured into paying additional interest of £4,000. His case was reported to the IMLT, which is now investigating.

How the IMLT can help

The IMLT is a national organisation, hosted by Birmingham City Council. It works with local authorities and other agencies across England to tackle illegal lending.

The IMLT can support businesses if:

● The loan is under £25,000 and used for business purposes

● The business is a sole trader, a partnership with fewer than four partners, or an unincorporated association

The IMLT cannot assist if:

● The loan is over £25,000 (as these are classed as exempt business-to-business agreements)

● The borrower is a limited company or other excluded business type

How businesses can stay safe

Business owners can reduce their risk of falling victim to loan sharks by:

● Checking the lender’s authorisation. Legitimate lenders must be registered with the Financial Conduct Authority (FCA) to lend less than £25,000 for business purposes (or any amount to individuals). Business owners can check the FCA Financial Services Register.

● Avoiding any lender that refuses to provide clear documentation or written agreements detailing the terms of the loan.

● Watching for the red flags listed above.

● Exploring safer alternatives, such as credit unions and Community Development Financial Institutions (CDFIs), government-backed loan schemes and grants from local authorities.

Where to get help

If you suspect that you or someone you know has borrowed from an unauthorised lender, it is essential to act quickly. The IMLT offers several ways to report illegal lending and seek assistance:

● Confidential helpline: 0300 555 2222 (available 24/7)

● Email: reportaloanshark@stoploansharks.gov.uk ● Website: stoploansharks.co.uk (includes a reporting form and Live Chat, available Monday to Friday from 9am to 5pm).