Question

I need some advice regarding lending money to a friend of mine. I have known this friend for many years, and they want me to lend them £10,000 so they can expand their business. My questions are, should I get legal advice on this and have things put in writing, and what happens if they do not pay me back?

Answer

Hi,

Lending money to family or friends can always be difficult, and can strain the relationship if they do not pay the money back.

When you mention lending money for your friend’s business, that sounds like an investment in some ways. And when you mention should you seek legal advice and have things in writing, I think you already know the answer to those questions.

I would advise to think about what the loan or money is for, as you mentioned expanding the business. Do you get a return on this loan, do you make any money. And yes, get legal advice and have matters in writing.

That is stock advice I have given for years.

Regards,

Jon

Leave a Reply

Your email address will not be published. Required fields are marked *