Best way to secure £15k investment / loan

THS

Have been asked to lend £15,000 to help kick-start somone's business in return for a generous lump-sum within 12 months.

Is there a way of guaranteeing I get my loan back if it all goes wrong? They have offered to add me to their house deeds (which I am currently seeking advice on in a separate thread) but I was wondering if there was a simple alternative.

I am excited at the prospect but also apprehensive so any help would be appreciated. Thanks

robatwork

If someone has no assets (as could happen if it all goes wrong) then from where would your money come?

You can put liens on their house, car and goat if you like but you will be behind the bank and HMRC when it comes to collecting your cash.

I would tell them to go to zopa/funding circle, and you will invest something you can more easily afford to lose eg £1,500.

TrustyOven

Only thing I can say is to get the agreement in writing, and signed. And be prepared to not get any of that money back.

This "someone" isn't a family member, by chance?

You way want to read through this thread:

https://forums.moneysavingexpert.com/discussion/76953

Families have been completely torn apart when they refuse to pay back the loans they borrowed. I think there were some posts in that thread where the poster loaned 15k or 30k for house improvement or business startup, and never got it back, and instead got a destroyed relationship with family member or close friend.

THS

TrustyOven wrote: »

This "someone" isn't a family member, by chance?.

No, I don't have any relationship with the person. Just had their details passed on and I'm interested in their business proposition.

jimjames

THS wrote: »

No, I don't have any relationship with the person. Just had their details passed on and I'm interested in their business proposition.

If they have sufficient capital in their house to pay you back, is there a reason why they haven't borrowed against that?

Is the bank unwilling to lend because of their past record or the plans they have or there is no capital there? Either way I'd do more checks first and if there is no capital in the house it's pointless putting a charge on it.

Linton

Can you afford to lose £15K?

If you have investments of say £500K, putting £15K into a business startup may possibly be an interesting, possibly lucrative but certainly risky addition to your portfolio. You would want to charge a high rate of interest to justify the risk or buy a % of the business.

If £15K is a large part of your long term savings putting it all into one high risk investment is a seriously bad idea.

Eco_Miser

THS wrote: »

No, I don't have any relationship with the person. Just had their details passed on and I'm interested in their business proposition.

So you're interested in investing a fairly large sum in a business proposition from a stranger?

How long before you're posting on here about being caught in a scam?

Archi_Bald

This one is screaming 'dodgy' all over.

Why, if the business proposition is so exciting, can't they get a loan from a bank, or a P2P lending platform, for a year? Is it because the business plan doesn't actually stand up on its own? Is it because they'd fail credit checks? Both?

Why would they wish to return "a generous lump" to a complete stranger, instead of keeping their profits to themselves?

DiamondLil

THS - Send them here:
https://ssl.bbc.co.uk/programmes/b006vq92/contact

traineepensioner

Dragons den? http://www.bbc.co.uk/programmes/articles/3D0rSm9tMLy9m9wJth7Fl7S/apply-to-enter-the-den

edit.....Just seen Diamondlil's posting, Doh!

THS

Eco_Miser wrote: »

So you're interested in investing a fairly large sum in a business proposition from a stranger?

How long before you're posting on here about being caught in a scam?

I didn't say they were a stranger, just not someone I'm emotionally connected to.


Thanks for your comments everyone.