Real-life MMD: Should I act as guarantor for oldest friend's son?
edited 3 December 2013 at 5:35PM in MoneySaving polls
74 replies 14.8K views
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Unless he can give you something THREE times the value ( sellable easily at half the price) to hold as surety should he not be able to pay you back within the agreed time. You would make it clear this would be sold without question no ifs no buts were the money not forthcoming as agreed, No extensions. This item would be jewellery, gold, antique. anything portable that YOU could take possession of and put in bank safety box. Valued by independent dealer in the type of item at a price he would be happy to give you without question, probably on the spot. So as to retain friendship all you would ask is the loss of interest at bank rate plus any expenses to make sure you were not out of pocket as this was to help him. the difference being returned to him. Written agreement witnessed by solicitor due to money involved. I was in this position at a much smaller amount many years ago for a friend but the item left was worth less than the loan resale value and friend said I should sell it so I lost out.
But only you can judge the situation if any doubt or bad feeling then as the others NO
I suppose it all depends on what the business is. Ronangel's advice is good - does he have any assets which you could hold? What's the £5k for - if its to buy equipment etc. could that be your security.
My gut feeling would be to say, sorry but I can't do it, as the risk to me is too high if the venture goes pear shaped.