The Dangers of Lying to Get a Business Loan

Some people are so desperate for money that they would rather lie on their loan application than get their application denied or rejected. This is a very serious matter. Little white lies can have serious consequences especially when filling out cheapest loans unsecured applications. It is wrong to be untruthful; we all know this since we have taught this for a very long time. Lying on your loan application can do more than just embarrass you; it can also send you to jail.

There are various ways for a lot of people to misrepresent the truth on their loan application forms. One of the most common things people do when lying to get a business loan is to increase or decrease their salary or revenues and profits. For example, the W-2 form is needed for many lending packages. Sometimes, no proof of income is needed. Some people also do not tell the truth if they are self-employed or not. Some people even go to the extent of falsifying their lease agreements so that lenders would be more willing to give them more money.

Risks

It is a fact that a lot of people lie on their application forms. Before you think about doing this, you need to understand that once you put your signature on the dotted line, you are subjecting yourself to possible criminal and civil penalties. It is against the law to be deceitful about the information you place on your loan application forms. It is much better to be truthful about your loan application, regardless if your chances of getting the loan approved is nil or next to nothing. For one thing, you will not have to worry about getting found out by the lender and getting jailed. You have a clear conscience and you will be able to sleep better.

Lying on your loan application just so you can increase the chances of getting your loan approved is simply not worth it. For one, lenders will almost always call the employer to verify the income. For people who are self-employed, a letter of verification from an attorney is needed. Once you are approved for the loan, you will also need to sign a document which gives the lender authority to review your past tow income tax returns. Although most lenders do not rally carry out this review, if they do they will find discrepancies on your income tax return and you will be held accountable for that.