would you lend a friend $2.5k? (update)

[StageLeft]

If his business was proven to work, there would be much less risk in giving money to expand it, but an unknown business in a competitive market like this is risky. Just remember that you'd be lending $2500 to a guy with no income. If his business doesn't get off the ground quickly he'll be finding it touch to satisfy what he owes people.

 

[EMPshockwave82]

usary was mentioned before and is illegal - any contract with an illegal clause makes the contract void and null...

make sure the interest rate isnt too high... if you ARE going to lend him money make sure you get it in writing but i believe something like 10% or 15% is maximum interest rate... make sure you call a bank and ask what the maximum interest rate they can charge by the usary clause / law

lending your friends money is one of those things you arent supposed to do though... it usually only causes fights... kind of like family reunions and politics

 

[alkemyst]

assuming your 2.5k gives him a total of $15k to start....that's a decent startup for a small business sharing a space....however without some credit (probably like $10k, at least $5k) to fall back on he is going to need to use about 1/2 that as a reserve. You screw up property, you need to handle a refund, etc. Chances are at least one customer will scam him on a charge back or whatever as well.

When people plan a new business they have dreams of day 1 having a line of customers outside the door....and I can say unless you are a popular franchise, you may was well play the lottery with those odds and not even open

Then you run into days where 5 people come in at once and you have the first idiot talking and talking and talking. He is looking at a $50 product and having you show him the $500 one too, then something not even related. The other four people look better dressed and more capable of a purchase...however you don't know this guy, he may just have inherited $100MM or a successful but sloppy business man. You cut him off the other 4 are going to think you are rude to your clients.

However, one by one the other 4 customers leave the shop....this guy is continuing to talk and finally just as the last customer leaves, finally says 'well I guess it doesn't matter anyway, I need to find a job and a place to live first, but thanks for helping me...thanks for your time, I am going to go catch that free buffet down the street, have you been there yet?, it should be starting in a couple minutes'

Then low and behold one of the customers that left comes back in. He tells you he just bought a complete install down the street "yeah man, my $15k bonus dropped like it's hot!" but they were short an RCA cable and he needs one about 3'.....

Å

 

[Ausm]

Originally posted by: ProUser
Been there, done that.

Don't do it.

Been there done that

 

[Leejai]

Only do it if you have faith in the business. Also, don't lend him the money if you don't think it's not going to work. And get a piece of the action, not just your money back. It sounds like you're a silent partner w/ ~20% say. (3k/15k). Otherwise, no.

 

[marquee]

update:

most people i talked to, here on atot and in RL suggested i avoid letting money get between friends. sounded like decent advice.

so i told my friend that i was sorry, but i couldnt bring myself to get involved. and then the sh!t started to happen. so apparently i had given him the impression i was ok with it, and was now counting on the money. understandably, he was a bit irritated since he would be screwed if i didnt loan him. i originally thought i'd be doing the right thing to keep our friendship well, but now it appears whatever i do, there's going to be a rift regardless.

well damn, i think i'm going to need a drink (or ten)

 

[manly]

Originally posted by: rh71
Only to my best friend.

My best friend (buddy) is probably the last guy I'd ever lend money to. He's just not responsible enough to ever pay it back.

Friendship and credit-worthiness are entirely unrelated.

 

[Yo Ma Ma]

Well chances are pretty good it would have caused a rift in the long run anyway, and this way you're not out $2,500. If he wants to get his business going then he will have to save for it first, and if he has the tenacity and skill to do it without a loan then it will be a lot more meaningful for him.

Originally posted by: marquee
update:

most people i talked to, here on atot and in RL suggested i avoid letting money get between friends. sounded like decent advice.

so i told my friend that i was sorry, but i couldnt bring myself to get involved. and then the sh!t started to happen. so apparently i had given him the impression i was ok with it, and was now counting on the money. understandably, he was a bit irritated since he would be screwed if i didnt loan him. i originally thought i'd be doing the right thing to keep our friendship well, but now it appears whatever i do, there's going to be a rift regardless.

well damn, i think i'm going to need a drink (or ten)

 

[Tetsuo]

Never, unless I got some kinda of deal on paper so the bastard couldn't back out

 

[TheToOTaLL]

Originally posted by: Tetsuo
Never, unless I got some kinda of deal on paper so the bastard couldn't back out

Definately.

Get it notorized, and make sure it includes repayment details, just like a loan any bank would give you.

 

[nan0bug]

sounds like your friend values your money more than your relationship then. if he's acting like an ass because you won't loan him $2500 then hes not much of a friend, hate to break it to you. I wouldn't dare ask anyone except a bank for $2500 unless it was an emergency and I had already sold off everything of value that I could live without.

 

[Banana]

Originally posted by: marquee
update:

most people i talked to, here on atot and in RL suggested i avoid letting money get between friends. sounded like decent advice.

so i told my friend that i was sorry, but i couldnt bring myself to get involved. and then the sh!t started to happen. so apparently i had given him the impression i was ok with it, and was now counting on the money. understandably, he was a bit irritated since he would be screwed if i didnt loan him. i originally thought i'd be doing the right thing to keep our friendship well, but now it appears whatever i do, there's going to be a rift regardless.

well damn, i think i'm going to need a drink (or ten)

This is a perfect illustration of money causing trouble.

 

[bolido2000]

Originally posted by: nan0bug
sounds like your friend values your money more than your relationship then. if he's acting like an ass because you won't loan him $2500 then hes not much of a friend, hate to break it to you. I wouldn't dare ask anyone except a bank for $2500 unless it was an emergency and I had already sold off everything of value that I could live without.

Yeap. If he is truly your friend he should be ok with it. He doesn't have other friends or relatives?

 

[dirtboy]

Originally posted by: marquee
i originally thought i'd be doing the right thing to keep our friendship well, but now it appears whatever i do, there's going to be a rift regardless.

You are doing the right thing. He's trying to manipulate you. He's using your money to allow you to be friends with him. If he can't respect your decision, then he's not a very good friend.

You have learned a valuable lesson about people today. Often times people you call friends aren't true friends.

 

[alkemyst]

Originally posted by: marquee
update:

most people i talked to, here on atot and in RL suggested i avoid letting money get between friends. sounded like decent advice.

so i told my friend that i was sorry, but i couldnt bring myself to get involved. and then the sh!t started to happen. so apparently i had given him the impression i was ok with it, and was now counting on the money. understandably, he was a bit irritated since he would be screwed if i didnt loan him. i originally thought i'd be doing the right thing to keep our friendship well, but now it appears whatever i do, there's going to be a rift regardless.

well damn, i think i'm going to need a drink (or ten)

Well if you had him 'banking' on your money by you pussyfooting around just not saying no, then that's bad. Sounds like you guys talked about this before even posting and had terms and conditions worked out, you knew how he was going to proceed, etc.

If he needs money he needs to find who can provide it and not waste his time (this happens a lot with small business financing, everyone tells you it's a good idea and wants a 'cut'....when it's time to get markers you get the 'you were serious?' look)....

It's very possible there is a worst rift now if you betrayed his trust. Anything I would need to think about I usually ask the other person not to describe things farther and give me some time to think it through. If I have the time or the money (the time is easier to claim lack of in most situations) I will let them know.

Å

 

[Gravity]

If that's how he reacted, then your friendship was fragile at best. Your friendship should be established so you can loan him $$.

$$ often ends relationships, friendships and marriages.

Try to stay away from that if you can.

 

[adelphi]

well one time my good friend in hs ask me to borrow a few hundred for his 'bros' bail (he was in a gang)
needless to say i haven't heard from the guy since, my other friends sez they saw his face amongst other on tv for burglary/ home invasion robbery

yea welcome to brooklyn