2014-09-30 01:03:31 Investors English If you’re afraid of asking someone you know for a loan, these tips can help you attain the most affordable way to subsidize your small... https://d2yxjugd6jl4bj.cloudfront.net/wp-content/uploads/2014/09/08232617/iStock_000046642654Small.jpg borrow money How To Borrow Money From Friends And Family

Financing Your Business

How To Borrow Money From Friends And Family

If you’re considering approaching someone you know for a loan to help fund your business, the tips below can help you navigate the process.

Before You Ask

Treat your friends and family as you would any other investorsBe prepared to answer your potential lender’s questions and share a visual representation of your idea whether it’s via slides, graphs, or schematics that demonstrate your plans and seriousness about getting started.

Know the following before you ask:

  • How much you’re asking for
  • Why you’re asking for it
  • How you’re planning on spending the money
  • How and when you will pay it back
  • Any consequences for late payment

 

Protect Your Relationship

Perhaps the greatest concern of entering into a borrower-lender relationship with a loved one is the fear of ruining your relationship. By seeking legal help and having a written agreement, you can reduce the chances of misunderstanding.

For more information on asking friends and family for funding, please see How to Ask Friends and Family to Fund Your Business.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.