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Business Loans from Family & Friends: How to Ask, Make It Legal & Make It Work
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$ 23.39
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$ 29.99 |
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$ 6.60 (22%) |
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| Item Number |
775628 |
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Item Description...
Product Description
Skipping the bank is an option: learn how to ask for money from trusted family and friends, keep it legal, and keep everybody happy
About 65% of domestic banks report that they have tightened their lending standards for commercial and industrial loans to small firms (CNN, September 18, 2008).
Many entrepreneurs at the early and often untested stages of launching or expanding a small business are having difficulty qualifying for traditional bank loans or venture capital in the down economy, particularly those with poor credit ratings. Business Loans From Family & Friends opens a window on an area of lending that accounts for more than 50% of all start-up business investment dollars, and, additionally, is a great resource for those who have identified their lending friends or family, but want to know how to structure the deal so that everyone understands it and no one gets hurt.
Business Loans From Family & Friends offers practical tips on how to approach and ask professionally, along with clear guidance on how to protect lenders from risk. It provides complete instructions for drawing up the paperwork to formalize the loan or investment, while the CD-ROM contains handy forms, including:
loan proposal letter
letters of intent
personal financial statement
promissory note, and more.
When I first started out in the record business, and was struggling to get by, my Aunt Joyce was kind enough to give me a small loan.
In my case, as maybe in yours, my aunt had heard through the family grapevine that I needed a loan, and when I came knocking on her front door she was prepared with her offer. I was incredibly grateful, took it very seriously, and paid her back - with generous interest - as soon as I was able.
That loan kept the Virgin Records recording studio afloat. It gave me the time and resources I needed to make my business a success. And many years, and many business ventures later, I still have her to thank.
Though my ventures and my lenders are considerably bigger now, I still witness the critical role that relatives, friends and associates play in the founding and growth of young businesses. And it makes so much sense, really. Friendly lenders tend to be a fast, flexible and affordable source of capital - as long as they can trust you are good for the funds.
If you can't get what you need close to home, and if banks have slammed their doors on you, get out there and keep searching. Even in recessionary times, a resourceful entrepreneur will find sources of capital from within their network or friends' networks. Be patient. Be persistent. Be resilient.
I'll say now that when it comes to growing a business I truly believe there are no rules to follow. What works once may never work again. You learn to walk by doing, and falling over, and it's because you fall over that you learn to save yourself from falling over. Raising money to fund a growing company is the same.
This is the only book I've ever seen that rolls up its sleeves to help entrepreneurs raise business capital from people they know. And I'm delighted to have a part in it to help you get started. I truly believe that success is when you have created something you can really be proud of. So, on with it!
Richard Branson
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Item Specifications...
Pages 287
Dimensions: Length: 8.9" Width: 7" Height: 0.7"
Weight: 1.15 lbs.
Binding Softcover
Release Date Nov 2, 2009
ISBN 1413310788
EAN 9781413310788
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Availability 1 units.
Availability accurate as of Feb 07, 2012 03:34.
Usually ships within one to two business days from Momence, IL.
Orders shipping to an address other than a confirmed Credit Card / Paypal Billing address may incur and additional processing delay.
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Reviews - What do our customers think?
 | Business Loans Dec 12, 2009 |
Starting a busines? Need some working capital? Finacing a new home or car purchase? Or just fell on hard times and need a helping hand? One of the best and most accessible means to capital is through family and friends. Commonly known in the venture capital business as Angel investors, private individuals are a common source of start up capital for entrepreneurs. However, for the average person, financing needs tend to be addressed though financial institutions. The average person tends to pass over the idea of a person to person loan even though this may be the easiest channel to a loan with advantages for both the both parties. Obvously, the most likely place to find a so called Angel is to look right in front of you, that is your friends or even your immediate or extended family. So just how do you ask? How do you make it legal? And moreover, how do you make it work. That"s the heart of this NOLO guide. The author, Asheesh Advani, is the founder of CircleLending, which is a company specializing in the business of person to person loans. In this guide, he walks you through the all the steps in the process involved with formalizing a person to person loan and helps you to overcome the common obstacles that prevent athe average person from accessing this source of capital. In this guide, you will learn about the advantages of the person to person loan, the legal and tax ramifications as well as how to draft the details of all the terms and conditions necessary to formalize the loan. The writing style is simple and direct. He provides multiple examples and real life situations. And he provides templates to help you draft all the legal documents that are needed for the do-it-yourselfer.
Overall, a useful guide for anyone who has ever been interested in person to person loans. Not just for a person who needs a loan, but also for the person who might have some investment capital. Why let all those banks make all that money when you can just as easily make the money yourself or give the business to your friends and family. Whave all seen the fat cat bankers raking it in without breaking a sweat. Wouldn't it be nice to do the same or at least let a friend enjoy the benefits? Surely, ther's a little bit on entreprenrial spirit in all of us. | | |  | Great resource for budding and experienced entrepreneurs Dec 12, 2009 |
The vast majority of small businesses in America are capitalized with personal funds or money from friends, relatives and strangers referred by friends and relatives.
The vast majority of small businesses also fail within the first five years.
This can lead to much unpleasantness as quarrels ensue over the terms funds were advanced and what was promised.
The reason banks and other institutional lenders insist on mounds of paper is to button up the deal in their favor - so you can't claim anything against them when they show up at the door to take everything you have.
Most informal loans lack that paperwork which can be disastrous for the already depressed entrepreneur whose business, despite high hopes, has crattered. Now angry friends, relatives and others are demanding to be repaid.
This quite surprising Nolo Press book beautifully fulfills a pressing and often ignored need: protecting yourself and your investors/lenders as best you can.
This is a soup to nuts approach to informal business lending. The book opens, again surprisingly, with an introduction by Sir Richard Branson, one of the most successful entrepreneurs in the modern world, who reminds all of us that it was a loan from his Aunt Joyce that kept Virgin Records in business at a crucial moment. Hard to believe that Richard Branson was once a struggling entrepreneur who needed his aunt's money to bail him out, but there you go.
The author, Asheesh Advani, has an interesting background in organizing small loans and takes a very professional approach here.
Step by step he leads the potential borrower through the steps from an encouraging chapter on why borrowing from friends and relatives is a good thing. For many, if not most entrepreneurs, it may be the only thing: the only financial resource they have.
He then moves on to how to check out commercial sources, such as banks, SBA guaranteed loans, social lending networks, even angel investors.
The met is in the succeeding nine chapters in which Advani lays out detailed instructions on how to assess the friends and relatives you're going to hit up for a loan.. (Remember, some relatives and friends may tell you where to go and what to do when you get there - and that doesn't mean they will be complimenting you.) Some of what Advani tells you is commonsense: prepare a business plan. A lot of it is specialist information: what are income tax implications of success and failure for you and your friendly lenders. One of the most interesting chapters is on how to size up your prospective lenders and how to make the "kitchen table pitch".
Overall, if you're looking to capitalize a new small business, especially in the current economic climate, and can't fund it out of pocket, you will need to turn to friends and relatives and even their friends and relatives to fund your business. Despite how great you think your idea is, remember that most small businesses fail within the first five years. An informal loan of a few thousand dollars from a friend or relative that goes bad can hurt you far more than the failure of a business. At least keep the loan legal and businesslike: it may not avoid hurt feelings, but it may avoid a legal battle. Good work and a valuable addition to the small-scale entrepreneur's library.
Jerry
| | |  | I found it useful Dec 11, 2009 |
I used this book to set up a couple of loans from friends. Granted, I could have probably done it without any paperwork, but in this day and age it is better to write things down just in case there is a dispute later.
The book is comprehensive in that it covers things like how to figure out who to ask, how much you need (budgeting) etc. I barely skimmed these parts. For me, the most useful parts of the book were the various forms on how to structure loans (different payment terms, secured / unsecured, etc), as well as some useful legal points on gifts vs loans (and again, why and how you should document both for tax and liability reasons). A nice touch is that all the forms and letters are included on a CD.
Why not 5 stars? After reading the book, I feel the topic is just too simple to merit a full blown book, and there is some intro fluff in here. The good parts are solid though. | | | | Get this book, for family and friends loans & even other relationship loans Dec 10, 2009 |
| I've read over 15 Nolo titles, and would say this ranks among the top two. Most Nolo books are filled with forms and layman law information. This is a strategic book. Identify who to ask, what tactics to use when asking them, assess the financial-personal relationship situation, provide them with sound paperwork, ensure if the worst happens that they receive at least an IRS deduction, become an investor PR department. I had thought loans involved primarly begging and then basic paperwork. This one shows the strategies, tactics, and relationships involved. I was really surprised I learned so much from this book. | | | | Very good resource for small business financing! Dec 7, 2009 |
The first thing I noticed about "Business Loans From Family & Friends: How to Ask, Make It Legal, & Make It Work" by Asheesh Advani was that the book had a foreword by Richard Branson. Having admired the founder and chairman of the Virgin Group, I figured if he'd endorsed it, I'd take a look. I was not disappointed.
The book covers a topic that you don't see that often. Sure, there are books on entrepreneurship out there that suggest a source of funds may be family and friends, but this book delves into the subject matter at a much greater level and provides a lot of practical advice on the topic.
The book is divided into eleven chapters with the following titles:
Why Raising Money From Family and Friends Is For You and Yours
Checking Out All Your Financing Options
Basic Legal and Tax Issues of Business Loans From Family and Friends
Deciding Who to Ask for Money
Preparing Your Business Plan and Your Fundraising Request
Deciding Interest Rate, Repayment Schedule, and Other Loan Terms
Drafting a Loan Request Letter
Making the Kitchen Table Pitch
Preparing a Promissory Note, Security Agreement, and Other Loan Documents
How to Be Your Own Investor Relations Department
Handling Gifts From Family and Friends
For anyone who is looking for small business financing, this book may have just the information you need. There is a lot of useful information here, and one of the best things I believe is that it gets the reader thinking about costs and sources of money for their business venture.
The book also comes with a CD ROM that contains a number of forms and worksheets. These are also found in Appendix B. Sample promissory notes, security agreements, and letters are a few of the documents included.
Nolo does an excellent job at making legal information accessible to everyone, however, depending on your situation, you may still want to seek out legal advice regarding any loan agreement you enter. However, this book is a great start and a very good resource for anyone who is looking to finance a small business and needs to raise money from family or friends. Very good resource for small business financing!
Reviewed by Alain Burrese, J.D., author of Hard-Won Wisdom From the School of Hard Knocks and the dvds: Hapkido Hoshinsul, Streetfighting Essentials, Hapkido Cane, the Lock On Joint Locking Essentials series and articles including a regular column on negotiation for The Montana Lawyer. Alain Also wrote a series of articles called Lessons From The Apprentice. | | | Write your own review about Business Loans from Family & Friends: How to Ask, Make It Legal & Make It Work
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