Lending money to family

[BlasterBates]

Don't you think you might be better off investing in a portfolio of shares giving you an average return of 8% than lending some bloke with a small business a few grand for a few percent interest, with a 50% chance of failing within 5 years.

[bless 'em all]

Looking on the bright side, this does score you 35pts on the IR35 test.

[scooby]

Have to laugh at Wim, with your attitude mate, will you lend me a couple of grand? I'll pay you back when they pay me? I think you missed a little sarcasm and bravado in there...

Some good suggestions in there, and actually spent another hour this morning with the 2 directors. I have, and still will, help them win business. I've even done the stand up tender response presentations for them in the past. I'm doing more than just pressuring. i've been helping them put together a marketing plan today to increase there visibility.

They are owed money, the factoring company wont pay up, turns out the invoiced co has a bad credit rating so the factoring co want the money from them before passing it on. Understandable really.

We have looked at and considered the shares options, the problem being again, is the amount of money owed to them, meaning they owe people too. The assets in the business are leased therefore pointless as the current balance sheet shows a worthless company, so it's awkward to define an amount of shares.

Yes, we have a contract in place and it clearly states i can recover by legal means at any point if no funds are coming in / payments missed. I've agreed with them to let them breathe, but that I am priority debt (wont stand up legally, but they are willing to do it as family). I think ultimately, they really dont want to shaft me due to the family thing. They are trying, but hands are tied. I dont want to push them under, I'm helping them recover the money they are owed. It's just not easy. If i felt that they wouldnt go under if their customer doesnt pay up, I wouldnt be pressuring. I'm not convinced, therefore I need to do my best for my shareholders to recover any monies, regardless of who they are to me.

I keep business separate from personal generally, and I am a different person in both. they know none of this is personal, and they know i want my money. We will still go to BBQ's and have a beer etc. we just wont lend money again! Blood is thicker than water and always will be.

[wim121]

Always awkward with family. I'm down about £20k built up over a few years helping my parents out and stopping their house getting repo'ed.

Didn't work in the end, and I'll likely never get that money back now. In hindsight it would have been kinder to let things take their natural course.

It would be yes.

I have a couple of mates like that. They have the "i want" generation mentality. Swimming in debt, decided to have a kid and get further in. They could work themselves out of it, but any time they free up credit, it's "i want a new *****".

To be fair, when we've helped out, we've been repaid, which has kept us in touch. They are like your parents though, they owe thousands to family members. We've helped out and grabbed stuff when they can't afford to eat, but the OH and I have both said to each other, the only way they will learn is if family stops bailing them out and lets them sink.

Wim - Bollax mate.

He did his family a favour by giving them a loan in the first place. They shouldnt take the piss now.

Agree with the OP. If they continue to take the piss, time to play hard ball.

Never lend money to family. My brother got divorced years and years ago, he let all the finances slip, house was going to be repossessed, car etc.

I suppose it depends on your perspective.

I agree they shouldnt take the mick, but I wouldnt assume they are. I personally wouldnt play hard ball with family, but each to their own.

Have to laugh at Wim, with your attitude mate, will you lend me a couple of grand? I'll pay you back when they pay me? I think you missed a little sarcasm and bravado in there...

I probably did miss some sarcasm, not great on picking up on it. Seriously though, if I knew you in person and you asked for a couple of grand, Im such a soft touch Id probably say yes.

Some good suggestions in there, and actually spent another hour this morning with the 2 directors. I have, and still will, help them win business. I've even done the stand up tender response presentations for them in the past. I'm doing more than just pressuring. i've been helping them put together a marketing plan today to increase there visibility.

They are owed money, the factoring company wont pay up, turns out the invoiced co has a bad credit rating so the factoring co want the money from them before passing it on. Understandable really.

I keep business separate from personal generally, and I am a different person in both. they know none of this is personal, and they know i want my money. We will still go to BBQ's and have a beer etc. we just wont lend money again! Blood is thicker than water and always will be.

Indeed, sometimes it can take more than a month or two to resolve.

I hope they do sort their business out and hope you dont fall out over it.

[xoggoth]

Families eh?. Lent no 2 son £25k for a house deposit a few months back.

Seriously, he ain't a problem, he and his missus earn a bomb and they are honest but I have a nephew who has tapped nearly every member of the family to cover their wasteful spending, kids at expensive private schools etc, and my elderly sister in law has nothing left for an emergency, they've taken nearly all her savings. But they never learn, every time I see them they've splashed out on some expensive unecessary crap, holidays to the US, balloon trips, top of the range smartphones for a 12 year old, expensive games consoles etc.