The risks of borrowing from family members to start a business
Posted on Tuesday, May 11th, 2010 at 5:49 pm
Many individuals who choose to start a business have trouble finding startup capital. Many significant investors will not risk investing in a startup, and most banks and other lending institutions will be unwilling to make significant loans to new businesses.
For that reason, many individuals turn to family members for loans and investment capital. In either case, individuals and their family members may want to create a formal contract. Such a formal contract will outline the terms of the agreement and account for any reasonable contingencies.
If you or anyone you know has questions about writing up a formal contract to start a business, contact the Des Moines business formation attorneys of LaMarca Law Group, P.C., at (877) 327-2600.