Provided you would hold the deed to the home, car titles, ownership of business property and major equipment, and anything else that could be used to secure at least 75% of the loan, would you consider it regardless of credit as long as the business plan is solid and the idea is viable?
2006-10-03 18:30:04 · 16 answers · asked by Anonymous in Business & Finance ➔ Investing
Oh, and the loan would be paid off in 3-4 years with 25% interest.
2006-10-03 18:32:25 · update #1
well if you trust this person maybe you should. if you dont trust him/her dont even try...just remember,,,...money can change anyone even if he/she is your best friend.but first,,,look to bright side of it evaluate,weigh, and decide. the important thing is TRUST....
2006-10-03 18:42:59 · answer #1 · answered by roel 2 1 · 0⤊ 0⤋
at 25% interest being paid why would I want them to pay it off in 3 or 4 years? Unless I had 200 k to give away no I wouldnt do it. I live by the old rule my mother taught me which is never lend anything to anyone unless you have it to give. Reason being that maybe at the time you can afford to lend someone some cash but maybe this time next year you are having finacial problems and are now in need of those 200k but now dont have them. You cant expect the person that you lent the money to all of a sudden pay you back all the money right then and there just because now you need it and even tho you hold the deeds to everything you cant sell the stuff to get the money either. I was wondering how would a home and cars and business property along with major equipment only cover 75% of a 200k loan? My sons house he just bought cost 500k. Why doesnt this person get a loan at the bank since it would cost far less interest and have longer to pay it back. Something is fishy . Having a business and owing that much in old debts and having bad credit should tell you something. The only way I would do something like that is if the house and business were worth more than the 200k . Forget the car titles those are worth about as much as the paper they are written on. Cars depreciate every year and a person can easily report a lost car title and get a new one issued. If you do decide to go ahead and loan this person the money make sure you get a lawyer to draw up the papers giving you the rights to the business and home and also make sure once you have the rights that you are not responsible for any actions against the business. It would suck if while being the temp owner the company got sued so just make sure that you are not connected to the business except for holding the papers.
2006-10-03 18:51:51 · answer #2 · answered by hersheynrey 7 · 0⤊ 0⤋
No, that's what banks are for. Too many variables here. Too risky. Deed to the home? Is it paid off? Who pays homeowners insurance on it? Do you have the financial means to evict someone? Would you draw up a lease about the living arrangement? Could owning business property also make you liable for future lawsuits against the business? You are setting yourself up to be a party to a lawsuit. Are you prepared to lose 25% of your investment? Are you prepared to repo a car if necessary? How do you determine it's value? As of the date you got the title or the date you repo it and sell it? Is the car paid off? Think long and hard.
2006-10-03 18:37:14 · answer #3 · answered by ellikat21114 2 · 0⤊ 0⤋
I wouldn't suggest it. When lending money you want to have more value than the loan itself, plus you would have to consider that even with "holding" (I'm not sure if that means transferring the title into your name)...you have to consider the cost associated with liquidating the property...you're not going to get full value for anything that you're holding...plus I'm pretty sure the person would put up a fight to keep their property even if it is used to secure a loan. Ultimately, you end up losing.
Secondy, if a person is desparate enough to pay 25% interest, then NOBODY will loan them money (for a reason).
Lastly, if a person needs that kind of money for their business, then they wouldn't be able to handle the additional debt load on their business. They're gonna have to make at least $50k/yr EXTRA just to pay you.
If you want returns that high...try commodities or roulette.
2006-10-03 20:35:53 · answer #4 · answered by Anonymous · 0⤊ 0⤋
No. It does not sound like a solid situation. The business plan is not described, so I can't comment on what it is. This person needs to stabilize by working for someone else in order to get their feet steady financially first. Maybe further education is a possible goal as well, if they do not already have a marketable degree or profession.
2006-10-03 18:39:55 · answer #5 · answered by Cub6265 6 · 0⤊ 0⤋
you are a sucker if you do. 1) if old debts were worth anything, why "sell" them to you? 2) if tangible assets are only 75% why are you not demanding security with 200% coverage, for example - with less than 100%, it's an invitation to take the money and walk. 3) tangible assets are not liquid assets - they can be hard to dispose of, may depreciate, and you carry that risk.(for nothing, I might add). 4) "solid" business plans fail all the time - even if it is truly solid, there are outside risks - why should you be the one assuming all the risk.
2006-10-03 18:44:42 · answer #6 · answered by JustaThought 3 · 0⤊ 0⤋
Nope, they are going to you for this because they have bad credit. You are just going to be added to the list. No matter how viable the business plan appears, the outcome depends on how hard they are going to get out there and work. If they get $200k given to them, why would they work hard?
If you go ahead with this, may I also borrow $200k for the same reason?
Sorry, don't mean to sound cynical.
OK you got me, yes I do.
2006-10-03 18:33:32 · answer #7 · answered by teef_au 6 · 0⤊ 0⤋
Unless you brought this to a lawyer and wrote out a specific payment plan over the next 10-20 years that is to be signed and agreed upon by both parties, and you knew the person was good for it the answer is No.
Tell them to go to a bank for that kind of loan
2006-10-03 18:35:49 · answer #8 · answered by Liera 2 · 0⤊ 0⤋
No. Because if there is good business plan and idea is viable, and he has assets, he can go for a bank loan. Why bother with me?
It takes more than just a buiness plan on paper to work.
2006-10-03 18:34:03 · answer #9 · answered by Anonymous · 0⤊ 0⤋
Seems like this persons owes on all of these things and if you give him a loan he could take that money and go leaving you holding items you can't do anything with. I would not trust such a person.
2006-10-03 18:39:22 · answer #10 · answered by Anonymous · 0⤊ 0⤋
It would depend on your own financial security first. Could you afford to lose that amount of money? I would also want to know the character of the person to whom I am loaning the money. Thirdly, I would certainly go to an attorney to completely seal the deal and also to make sure that HIS assets would cover his debt to you after they have depreciated. Please be prudent before you loan your money!
2006-10-03 18:36:14 · answer #11 · answered by Royallady1947 5 · 0⤊ 0⤋