Home | Newest Editions | Most Popular Issues | Free Newsletters | Forums

Custom Search
Publication: SoHo News and Tips
Formalizing Loans From Relatives, Friends

Subscribe FREE to SoHo News and Tips by clicking here.

                   SoHo NEWS & TIPS
Helping You Make the Most of Your Small Office/Home Office

Comment The Post Below...


It's nice to have family and friends to help you with loans 
if you are starting up your own business. However, you must 
remember that just because you have a personal relationship 
with the person you are borrowing from doesn't mean you 
should slack on paying them back! Borrowing from relatives 
can have many advantages, but it can put your personal 
relationships at risk if you aren't careful. 


Be sure to visit the SoHo News and Tips blog!
SoHo News & Tips Blog


Now -- A Fanny Pack That's Both Functional & Fashionable

Introducing the Genuine Leather Fanny Pack. With six (6) 
zippered compartments... there's room for your checkbook, 
wallet, keys, cell phone, camera, film and accessories... 
all hands-free. Great for women and men on vacation.

Comes with a special click n' lock buckle and adjustable 
nylon waist band up to 42". Ideal for walking, camping, 
shopping, or traveling. Plus, this Fanny Pack looks fabulous 
with any outfit.

Now JUST $14.99...or SAVE $10.00 when you buy two. To see a 
picture or to order, VISIT TODAY at:
Genuine Leather Fanny Pack



-  General Motors announces agreement to sell a 
   majority stake in GMAC for $14B... 

- A new accounting standard results in a net earn-
  ings reduction of $1.2B for Merrill Lynch...

- Ameristar offers to buy Aztar for $1.5B...

- Alcatel to buy Lucent for $13.4B. 8,000+ jobs 
  will be affected...

- Rumor has it Modem Media is losing clients and 
  will start cutting staff across the board in 

- Ebuyer announces it will stop accepting U.S. 

- Delphi announces major cuts/closings in an 
  attempt to emerge from bankruptcy...

- Yahoo! Inc. will offer integrated e-mail, instant 
  messaging and Internet search software to more 
  users of Research In Motion Ltd...

         GopherCentral's Question of the Week

Do you think our nation should go to war with Iran?

Question of the Week


When I am an Old Woman I Shall Wear Purple With a Red Hat...
       ** Introducing the Red Hat Collection **

Proclaim your passion for the women donning red hats whenever 
and wherever you go with the Red Hat Collection. Each 
collection comes with a Red Hat Necklace, Pen and Magnet. 

Flaunt them at your next meeting and you'll be sure to get 
compliments. And every lady in the club will want one. Order
now and this collection can be yours for $9.97 by visiting:
Red Hat Collection


Formalizing Loans From Relatives, Friends 
By MARSHALL LOEB From Marketwatch 

Are you searching for money to start a new 
business? The first place entrepreneurs commonly 
look is their own savings or credit cards. The 
second place is family and friends. 

Such private loans and investments from relatives 
and acquaintances are often an integral part of 
raising start-up capital, when a business is too 
small or unproven to qualify for commercial lend-

Entrepreneurs generally provide two-thirds of 
their own start-up capital. Private loans and 
investments make up the bulk of the rest, accord-
ing to the Global Entrepreneurship Monitor, a 
consortium of universities. 

The advantages are lower interest rates than at a 
bank (or none at all), flexible repayment and a 
certain amount of forgiveness if your start-up 

But borrowing from relatives, or allowing them to 
invest in your new business, can put your personal 
relationships at risk, and the cozy nature of such 
loans can lead business owners to be lackadaisical 
about repaying the money. 

Continued below....


  Don't Take Any Chances When It Comes to Your Health
   Why Monitoring Blood Pressure at Home Is Important 

The North American Healthcare Association has shown that 
monitoring blood pressure in the comfort of your own home 
provides a more accurate reading by avoiding the stressful 
environment of the doctor's office.

Now for under $30 you can get the Wristech Blood Pressure 
Monitor which will provide a completely safe and accurate
blood pressure reading without leaving your home. Don't let 
the stress and hassle of the Dr's office affect the readings 
of your pressure. Use the Wristech Blood Pressure Monitor.
Visit: Wristech Blood Pressure Monitor


The default rate for such friends-and-family loans 
is 14%, says Asheesh Advani, owner of CircleLending, 
which manages private loans; he is also author of 
"Investors in Your Backyard" from the Nolo do-it-
yourself book series. 

If there's one piece of advice to heed above all 
others, it is to put your financial arrangement in 
writing. Write a formal business plan, make out a 
promissory note and draw up a formal repayment 
schedule and stick to it. Such documentation cuts 
the default rate on private loans in half and 
makes it easier for both parties to claim their 
tax benefits, Advani advises. 

Loans are far more popular than equity investments 
because they are cheaper and don't tempt an uncle 
or aunt to try to run your business. Advani says 
entrepreneurs pay an average 6% on loans from 

Be honest with your lenders about what they're 
getting into. Most relatives will invest in your 
start-up for more than just altruism; they want to 
see you succeed, but they also want to make some 
money, too. 

For information from the Small Business Administ-
ration on financing a start-up, writing a business 
plan and other guidance, go to www.sba.gov.


Time your date of incorporation so that it includes the bulk 
of the tax year, or you could end up filing a tax return for 
a corporation that was only in operation for a few days 
within the tax year.

So what did you think about this issue? Drop me a line and let 
me know at mailto:mandi@gophercentral.com 

Archive link:
SoHo News & Tips Archives
End of SoHo News & Tips  http://www.SoHoTIPS.com
Copyright 2006 NextEra Media.  All rights reserved. 

E-Mail this issue
Subscribe FREE to SoHo News and Tips by clicking here.

The SoHo News and Tips Forum
ringtones free
Welcome to SoHo News and Tips!
View this Forum | Post a topic to this forum

Caught on Tape - How To Get Fired

Watch Video Clip

Home | Newest Editions | Most Popular Issues | Free Newsletters