Hello,
A friend has asked me to help him out with a short term loan. He wants the money as additional working capital to aid growth in his small, but established, cash generating business.
He has had a previous business fail, so has a damaged credit record and a judgement outstanding. He is making small regular payments at an agreed rate, against this historic debt. For this reason, traditional lending institutions are not an option for him.
While my first instinct would typically be to avoid getting involved in lending money to friends, I am tempted to try and help on this occasion. However, before I go any further, I am wondering:
- how do I document an agreement between us, without appearing to be some form of private money lender ?
- if things go wrong, are such documented agreements enforceable by law ?
Needless to say, I am talking about a large enough sum that I would like the loan agreement documented, but equally I appreciate that if he fails to repay then there's a risk that I'll never see my money again.
Many thanks,
A friend has asked me to help him out with a short term loan. He wants the money as additional working capital to aid growth in his small, but established, cash generating business.
He has had a previous business fail, so has a damaged credit record and a judgement outstanding. He is making small regular payments at an agreed rate, against this historic debt. For this reason, traditional lending institutions are not an option for him.
While my first instinct would typically be to avoid getting involved in lending money to friends, I am tempted to try and help on this occasion. However, before I go any further, I am wondering:
- how do I document an agreement between us, without appearing to be some form of private money lender ?
- if things go wrong, are such documented agreements enforceable by law ?
Needless to say, I am talking about a large enough sum that I would like the loan agreement documented, but equally I appreciate that if he fails to repay then there's a risk that I'll never see my money again.
Many thanks,