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Borrowing money from friends and family

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  • Borrowing money from friends and family

    Have you ever wanted to borrow money from friends or family to expand your business?

    This is an interesting article about a business that actually facilitates the process. They provide structure for the loan payments and keep tract of what you owe and what you promised to pay.

    Not a bad idea actually!

    What do you think about it?

    How to borrow from those you know and not ruin the relationship - "Typically, it is a case of ‘Here’s $25,000 to open your new business, just pay me back in three years.’ This is a recipe for disaster," says Asheesh Advani, CEO and founder of Waltham, Mass.-based CircleLending, which facilitates private loans. "Even if the business is doing fine in three years, it is unlikely the borrower will be able to make a lump sum payment to repay the loan." There is also the risk that after three years, the borrower will mistakenly remember the loan as being a gift.

    Advani says that roughly 9 percent of all households have a friend/family loan outstanding. And while the $89 billion person-to-person loan market may be a drop in a consumer loan market bucket worth trillions, he decided it was enough to base a business on.
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  • #2
    That's a neat idea. Handle it like a bank loan, everything in writing, minus the regulatory bovine scathology....

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    • #3
      Yea! and it actually may get people to lend you money that normally wouldn't because they fear it would never be paid back.
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