MONEY MORAL DILEMMA. Should Margaret let Nick remortgage to back her new business?

chesilfan

Absolutely not:eek:

LameWolf

No. When it all goes horribly wrong, there'll be a big family falling-out which will be much more far-reaching than just Nick and Margaret never speaking to each other again.

jeanmd

No. No. No. No. No! No argument - the answer is NO.

Cloudane

reluctantworkingmum wrote: »

Hang on here - I take issue with the 'let him' - she is 25, still wet behind the ears while he is a fully grown adult with life experience.
He will know her better than any bank manager and if in his judgement it is a good enough gamble to bet his house on then I would accept that. I think it would be insulting to him to 'not let him'

I see what you're saying, but not all parents are as financially savvy as their offspring (especially if their offspring are MSE regulars ) and certainly not necessarily as financially savvy as a bank manager. There is surely more to an investment decision than how well you know the person asking.

Hopefully he wouldn't take it personally

molemag

Nick should ask himself if he would be prepared to sell his house and downsize to free £60,000 to lend to her.

• If he is, he should raise the money that way, because then his home will not be part of the equation.
  
• If he isn't, then he should confine his support to non-financial matters; advice, time, introductions and so forth.

RobinGB

If the house would truly be at risk, or her dad needs that money then NO. If her dad is trully happy to loose that money and has other savings that he doesn't wan't to use, e.g. ISA's then OK. But if he can't afford to loose the money then absolutely not!

Also even for experienced budgeters, there is a strong practical case history accross many projects to say, make your best and most realistic budget and then double it. From my experience if they haven't already done that they could easily be looking at needing £120K, not £60K. Sadly this can quickly become a trap for them, i.e. when they realise they actually need £120K do they walk away from it having already invested £60K and loose their £60K or do they then throw in another £60K and expose £120K of the fathers assets.

My advise, don't do it. If you have a sound proposal go and find an invester, for who it is just spare money, not the roof over the heads and their retirement pension pot. Many of the best plans can be ruined by forces outside of your control. So even if you are certain of your plans, you cannot be certain of factors outside your control!

Once more, DONT RISK WHAT YOU CAN'T AFFORD TO LOOSE!

johncolescarr

the dad should ask for a stake in the business as if it were any other business deal, this way he shares the risk and reward, rather than just the risk

however, before, he should convince himself that he understands the business plan and satisfies himself that it will work

catch22

NO - First and foremost, today's in place can be tomorrows morgue.

Has she any management experience in the bar trade?
The location is everything - what's the surrounding trade like in the evenings? Infact what is the surrounding trade, is there trouble? What is the property she is looking at been before - if it was a nightclub why are the people selling (how many pubs, clubs, have you seen become successful after being reopened, especially if the previous owners were unsuccessful) What clientèle is she aiming for?

1998jjb

No no no no no no no!!!

Stampede_2

Short answer: No
Longer answer: No. No. No.No. No.

The whole industry post the Licensing Act 2003 reforms and changes is one of the most difficult to survive in. It is cut throat, profit margins are squeezed, and expensive refurbishing frequently required to stay at the top of your game. Customers, esp the young and night club crowd are fickle, easily lost to the next 'in' place to be seen at.

The Govt. licensing legislation whilst opening up opportunities is also urging Police forces to clamp down on under age, anti social, and binge drinking. If you get caught, and many unfortunately are, selling to under age persons could be a £5000 fine for you, temporary - up to 3 months enforced closure even a total loss of your premises. A personal licence - your personal authority to supervise and authorise alcohol sales - can be suspended for up to 6 months and if taken from you completely you are disqualified from seeking another one for 5 years.

The Q suggests enthusiam but a lack of business acumen so money borrowed on a personal liability of family and friends and their house is just far too risky.

:j totally debt free, with money in the bank 'in case the roof needs repair'.
As my A suggests I have many years experience of licensing law, training and the industry.