Get Your Business Funded: Creative Methods for Getting the Money You Need

The Bad News

Borrowing money from someone you know well is fraught with danger and many a relationship has ended because of it. Of course you think you have a great plan, and you well may, but there is a reason that banks are reluctant to loan money to new startups; namely, they are risky and the chance of being repaid in full and on time is not as high as the bank would like. It is that very risk that is the danger here. If you are able to repay the debt as agreed upon, then all will be fine. But it is when someone cannot or does not that problems arise.

The important thing is to be prudent. Don't ask for the money unless you have a solid plan for paying it back. Don't ask for the money unless you really do plan on paying it back. Don't ask for the money if the person you are asking cannot really afford it. Don't ask for more money than they can afford, or can safely afford to lose. Don't ask for more money than you need. Don't borrow the money with an “I will get it back to you someday” attitude.

This should be viewed as more business deal and less personal favor, rather than the other way around.

The other thing of which to be aware, even if and as you do repay the loan on time, is that borrowing money from a loved one will change your relationship to one degree or another. The mixing of one's personal life with one's business life, whatever the circumstances, affects both. It is not unlike dating someone from the office—it changes things. Money changes things.

Have I scared ...