Personal Loan Agreements between friends

John1993_2

gb12345 wrote: »

But it still isn't worth the paper it is written on. You would need a court to award a CCJ against him and if he doesn't have the money then you might be lucky to be repaid at a pound a week or something.

You forget, the OP KNOWS that it will be repaid.

Given this, of course, you have to wonder why exactly she needs a written and enforceable agreement...

DCFC79

Hope it goes well for you OP

Thrugelmir

Hard_food_for_midas wrote: »

Normal lenders can be a bit slow on the uptake and not dynamic enough for small/medium size businesses - look at all the headlines - money from banks is not getting through to our businesses. Where it is, it trickles, crippling our economy.

So what due diligence have you conducted on your friends business?

dealer_wins

Hard_food_for_midas wrote: »

I have absolutely no doubt that the loan will be repaid.

You dont need an agreement then, just a repayment schedule or book or spreadsheet.

ReadingTim

dealer_wins wrote: »

You dont need an agreement then, just a repayment schedule or book or spreadsheet.

Nah - far too formal. I suggest a handshake and a "gentleman's agreement" - after all, "my word is my bond".... Anyone reading some of the treads on this board knows that....

John1993_2

ReadingTim wrote: »

Nah - far too formal. I suggest a handshake and a "gentleman's agreement" - after all, "my word is my bond".... Anyone reading some of the treads on this board knows that....

Interestingly (or not), that's still the way it works in investment banksing. Deals done verbally, in billions of dollars are closed over the phone, or face to face, with the details being followed up later on.

If the deal moves inbetween it would be inconceivable to quibble, cavil, or try to back down just because it no longer suited.

it's quite a long way, I think, from how the general public assumes we are. It probably explains why I manage to keep coming across as surprised when borrowers so casually turn to "well of course Ii'm not paying it back, I'm a bit short this month, and am saving for Christmas" on here.

bigadaj

John1993 wrote: »

Interestingly (or not), that's still the way it works in investment banksing. Deals done verbally, in billions of dollars are closed over the phone, or face to face, with the details being followed up later on.

If the deal moves inbetween it would be inconceivable to quibble, cavil, or try to back down just because it no longer suited.

it's quite a long way, I think, from how the general public assumes we are. It probably explains why I manage to keep coming across as surprised when borrowers so casually turn to "well of course Ii'm not paying it back, I'm a bit short this month, and am saving for Christmas" on here.

Though didn't work out well if you were dealing with lehmans in the end, a default is a default at the end of the day.

Wyndham

I assume we're talking a reasonably substantial amount of money here? With any loan like this, you need to ask yourself if you can afford to lose the money. A tenner here and there is very different to several thousands - and I'd do the first, but not the second.

I too have questions around why your friend can't raise the money any other way. This implies risk, and you need to be sure you fully understand what that risk is. If the business is looking good at the moment, that doesn't mean it will still look good in six months or a year. What do you do then, and what does your friend do then in terms of repayments?

John1993_2

bigadaj wrote: »

Though didn't work out well if you were dealing with lehmans in the end, a default is a default at the end of the day.

I don't think you've understood what I've written. I made the point that if a dealer agrees a deal and then finds that ten minutes later, (long before any contracts are exchanged), that it doesn't look so good any more (and profit margins are slim enough that ten minutes is enough time for a deal to double in value or be in loss), he would never consider even for a second reneging on it, it just doesn't happen.

Yes, defaults can happen later, which is why we pledge collateral to one another. If my counterparty bank has a deal with me that's £1m in my favour, then they need to deposit something North of £1m of securities or cash with me that very day. If the next day the deal has moved up to £1.1m in my favour, then they need to top up the collateral to reflect this.

You seem to be conflating willingness to honour a deal with ability to honour a deal. It's this that still surprises me around here, the number of people who are "struggling with debts", yet still putting money away for Christmas or a holiday.

27col

[QUOTE=

Normal lenders are giving them the run around.

.[/QUOTE]
Presumably because they are not happy with their credit worthiness.