One of the often overlooked options for small-business and startup financing is getting a loan from a friend or family member. Not only can this kind of person-to-person loan be easier to get, but it’s also more intuitive for both parties than trying to work out an equity-based deal. Getting your Aunt Sally to loan you $50,000 just isn’t going to be as complex as trying to create a meaningful valuation for your startup for her to buy equity in. But just because they love you doesn’t mean that friends and family loans should be taken any less seriously. Get this kind of deal wrong, and your family holidays are going to become pretty awkward.
In today’s episode, host and business coach Tom Ryan explores a simple example of a friends and family loan in action. As always, Tom is joined by producer and co-host Jason Pyles. Continue reading