Looking for opinions regarding investment loan from family - Page 2

this is the worst suggestion in the thread. His family members aren't lending to a 3rd party and assessing their creditworthiness. They are doing it because they are family.

Would you be looking for 12-20% if you gave someone in your family a loan? Most people would say no.

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04-19-2015 , 10:37 AM

#28

Z06Fanatic1

adept

Join Date: Feb 2015 Posts: 835

Quote:

Originally Posted by wil318466

Did you even read the thread? OP asked what would be a fair return to give his family for the loan - of course they're not looking for a return but he feels the need to compensate them....a fair compensation would be somewhere in the range of 12-20% which any private lender would want in this scenario......I doubt any bank would loan him 100k without some good tax returns/collateral to back it up.

Theres no other advice to offer OP other then what a reasonable return is in the real world.

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04-19-2015 , 10:46 AM

#29

wil318466

banned

Join Date: Mar 2010 Posts: 19,154

Quote:

Originally Posted by Z06Fanatic1

Of course I read the thread I replied in it 3 times.

The entire point of it is that the situation involves family members that aren't worried about the loan. What you are suggesting is to make it equal to something a bank would look for. Honestly, if he was going to do that why wouldn't he just borrow from a bank and cut the entire family dynamic out of it?

If a bank offered me a 100k loan at 12% and my family offered to let me borrow it at 12% I'd just take it from the bank. What you are suggesting is nonsensical.

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04-19-2015 , 06:18 PM

#30

Abbaddabba

Pooh-Bah

Join Date: Jul 2005 Posts: 5,807

12-20% a year is insane. Even if you didn't want to do it as a personal line (where the rates would be considerably less for anyone with decent credit) there're services available to people who have well thought out business plans and are looking for financing.

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04-20-2015 , 12:03 AM

#31

STJEAN81

banned

Join Date: Jun 2009 Posts: 700

Yea, I was joking about the 2 cars. Obviously buying them a car as a favour for a 50k interest free is insane haha.

12-20% is also very high. Again, the loan was offered interest free and to just pay it back with the profits, but I told them I'd like them to get some kind of small return on the loan at least. 20% on that would be way too high IMO.

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04-20-2015 , 06:46 AM

#32

iDntPlayPkr

centurion

Join Date: Nov 2014 Posts: 147

Not sure if this has already been suggested, but I say just offer them 10% of any long-term profit. If they offered you an interest free loan, and you want to offer them a return, just give them some upside imo.

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04-21-2015 , 08:48 PM

#33

ohmyrage

adept

Join Date: Jul 2009 Posts: 877

I still disagree with paying them ANY interest! They are giving you a 0% loan to HELP you as FAMILY, their interest is in YOU succeeding, not making a few thousand dollars.

The only thing you owe is your success and HELPING other FAMILY members in the FUTURE!

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04-27-2015 , 03:10 PM

#34

fanmail

Carpal \'Tunnel

Join Date: Jun 2005 Posts: 32,698

Quote:

Originally Posted by STJEAN81

I'm not trying to justify anything. I didn't push to get this loan, it was offered to me, interest free. I just feel a little more comfortable giving them some type of return, as it's obviously extremely generous.

I like the idea of giving them x% of the profits until the loan is paid off. I'm going to run a few options by them and see which they prefer.

Buying them 2 cars seems like the favourable choice.

What % would the bank charge you for the same loan? If you're really going to borrow money from family (which I would strongly advise against), the correct answer is somewhere higher than 0 and less than the bank rate.

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