for local lending firm

For starters, you'll need to get registered under the respective money lenders Act of the State concerned. Like the Punjab Registration of Money Lenders Act, 1938, Maharashtra Money Lending (Regulation) Act, 2014 and similar laws applicable to other States. Without a valid registration under law, you may not be able to sue for recovery of the momey lent or for dishonor of cheques. Many money lenders try to resort to shady practices and loan money withoht registration, only to face problems before Court later.