5 Business Ideas That You Should Not Borrow Money For

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Starting a business is always a good way of building wealth. But not all businesses will succeed, and not every single business idea is worth pursuing. 

With that, it also would not be wise to take out loans from a legalised money lender in Singapore for these five unprofitable business ideas. Think twice before starting these businesses with loans.

Anything that runs on a SaaS model

These days, we can see many successful Software-as-a-Service (SaaS) companies, such as Slack, Trello, Zoom, and a whole host of others. These companies provide useful software where clients have to pay a monthly recurring fee to use the software. This subscription model ensures continuous revenue for the SaaS companies.

But now, the SaaS market is too saturated. It is easy to build a SaaS business but hard to make bank with it. You need a truly unique, world-changing idea to build a SaaS company that will make an impact (and a huge profit) these days.

Anything with ‘AI’ attached to it

Artificial intelligence (AI) is the latest trend to hit the world of tech. Nowadays, you can see many companies, both big and small, offering products that are AI-powered, AI-enabled, AI-enhanced, or some other variation of the term. 

The hard truth, though, is most of them just use AI as a buzzword to make their products look trendy. If you have a business idea that involves AI, but your AI system is not your own, better reconsider. It’s not worth taking out a loan for this kind of business if your aim is just to sound trendy.

Anything with ‘Blockchain’ attached to it

Blockchain is another of those hyped-up technologies that can be attached to anything. This came before AI, but the pattern is similar. Companies slap the word blockchain into their products to make them look like the latest cutting-edge technologies.

But if you do not fully understand blockchain technology, how it works, and what it’s useful for, hold off on borrowing money for your business idea. You may think it’s going to be the next big thing, but it may well be gone in a hurry.

Hype-driven products

Things like fidget spinners and selfie sticks are products driven by social media hype. These products are not sustainable, and you will likely lose money in the long run if you keep selling them after the hype dies down.

You may make a lot of money in the short term, as the hype remains alive. But that’s as far as it goes – once the hype is gone, your profits are gone too. It’s the end of the business.

With that, it may not be wise to take out a loan for a business idea based on a hyped-up product. The hype may die down even before you have paid off the loan, turning your business into a liability.

Multi-level marketing (MLM)

MLM-type businesses are definitely not the types you should take out loans for. This kind of business is also unsustainable, especially those that focus on getting more people under you than actually selling products. If everyone in the business does the same thing, they will run out of people to invite very soon.

Most importantly, statistics have shown that less than 1% of MLM business owners make a significant profit. Usually, these are the people who came first and who have the most number of recruits. The other 99% drop out, failing to even recoup their initial investments.


Avoid these five types of businesses if you want better chances of succeeding and making money. Moreover, it’s a bad idea to borrow money from a licensed money lender in Chinatown or any area in Singapore if you want to try your luck on these kinds of businesses. Think of profitable business ideas first before deciding to take out a loan.

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