Was this page helpful?
Thank you!

Comments or suggestions?

Enter Email Address (optional)

Borrow money from friends and family (New Business Checklist)

If you can't fund the business on your own, friends and family are a great option. Unlike a bank, they know your character well and will probably be more willing to take a risk on your business idea. However, because of the risk that mixing business and friendship may sour the relationship, you'll want to proceed carefully. Here are some guidelines to follow:

  • Have your attorney draw up a formal agreement with collateral specified and all the terms spelled out, including the interest rate, payment schedule, and what recourse the lender has if the loan is not paid.

  • When you pitch your business idea to your friend or family member, approach the meeting professionally. Present your idea and your business plan just as if you were applying for a loan at a bank.

  • Avoid mixing emotions with business. If a family member offers to loan you money in exchange for having a closer relationship, accepting the offer could create a very bad situation.

11/19/2017 12:24:04 AM
PPRDQSSWS904 9142 Pro 2018 df02fb