Micro-loans as biz investment?

[LisaContractorUmbrella]

Hi,

Apologies for bringing up an old thread.

Does anyone have any experience of business-to-business type lending?

Someone I know has a business and he wants to expand and is need of a loan.

Can my business lend him some money (+small profit) without jumping through too many hoops (accounting/legal)?

So, for example he wants a £30,000 loan + £5,000 my profit over 24 months

Is this thing quite common? are there any template contracts around?

Personally, the chances of him defaulting are medium-high, is there a way to protect myself?

Look forward to your replies

Thanks

Yep don't do it.

[frontenddeveloper]

Yep don't do it.

Apart from the fact he *may* default is that the only reason I shouldn't do it?

[LisaContractorUmbrella]

Apart from the fact he *may* default is that the only reason I shouldn't do it?

£30,000 is a pretty big reason but no. I assume you have some sort of relationship with this chap - if you do and he defaults it will be ruined. Even if he doesn't pay on time and you have to chase him it will be ruined. If you don't have a relationship with him then I would question why you'd think it would be a good idea to loan the money. IMHO without a guarantor you are taking on a big risk

[eek]

Apart from the fact he *may* default is that the only reason I shouldn't do it?

• No but a fool and his money is easily parted.

• Keep money and friendships separate.

[frontenddeveloper]

Thanks, you may have prevented me from doing something stupid...

Now, how do I let him down gently?

[LisaContractorUmbrella]

Thanks, you may have prevented me from doing something stupid...

Now, how do I let him down gently?

Just explain that his friendship is too important to you to risk damaging it over something like money - if he's a mate he should understand