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    • MSE Jenny
    • By MSE Jenny 16th Jun 09, 4:04 PM
    • 1,228Posts
    • 3,559Thanks
    MSE Jenny
    MONEY MORAL DILEMMA. Should Margaret let Nick remortgage to back her new business?
    • #1
    • 16th Jun 09, 4:04 PM
    MONEY MORAL DILEMMA. Should Margaret let Nick remortgage to back her new business? 16th Jun 09 at 4:04 PM
    Here's this week's hypothetical situation for you to cogitate on:

    Margaret is a 25-year-old entrepreneur who desperately wants to set up her own nightclub business. Yet she can’t find the £60,000 backing needed to set up the company. Her Dad, Nick, offers to remortgage so he can invest in the firm. While Margaret’s confident the nightclub will take off, Nick’s home will be in peril if it fails. Should she let him remortgage?

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Page 1
    • Flickering Ember
    • By Flickering Ember 16th Jun 09, 6:07 PM
    • 11,623 Posts
    • 128,854 Thanks
    Flickering Ember
    • #2
    • 16th Jun 09, 6:07 PM
    • #2
    • 16th Jun 09, 6:07 PM
    I'd say Nick should look over Margaret's business plan, preferably with someone knowledgeable; why has nobody else backed it. Yes, she's his daughter but not only is it his home but also eventually her inheritance he'd be putting at stake. Could Margaret not get a loan?
    Flickering Embers grow higher and higher...I need a break and I wanna be a paperback writer!
    • scotsbob
    • By scotsbob 16th Jun 09, 6:11 PM
    • 4,462 Posts
    • 6,958 Thanks
    scotsbob
    • #3
    • 16th Jun 09, 6:11 PM
    • #3
    • 16th Jun 09, 6:11 PM
    NO.
    Never, ever, not ever, give a woman that much money.



    .
  • CandyBar
    • #4
    • 17th Jun 09, 5:50 AM
    • #4
    • 17th Jun 09, 5:50 AM
    No, not unless Nick has other investments to fall back on if Margaret doesn't come through.

    A tad inspired by "The Apprentice" eh? ("Nick" and "Margaret" being Sir Alan's two advisors, and Yasmina, this year's winner, having launched her restaurant with money from her Mum who remortgaged the family home)
    • Taffybiker
    • By Taffybiker 17th Jun 09, 6:55 AM
    • 917 Posts
    • 499 Thanks
    Taffybiker
    • #5
    • 17th Jun 09, 6:55 AM
    • #5
    • 17th Jun 09, 6:55 AM
    Not a chance! If the night club had a good chance of survival there would be a queue of lenders throwing the money at Margaret. The fact she can't find financial backing elsewhere serves as a warning against the project.
    Try saying "I have under-a-pound in my wallet" and listen to people react!
  • karlosuk
    • #6
    • 17th Jun 09, 8:21 AM
    completely mad
    • #6
    • 17th Jun 09, 8:21 AM
    Night clubs are prbably the worst new business venture to invest in and to remortgage to fund it is absolute madness.
    the window of opportunity for a nightclub to get revenue is between 12am and 4 am friday and sat night or 8 hours to be exact , to say they are up against it is an understatement.
    the running costs are astronomical and (rent entertainment and security) all at a premium and the liklyhood of success is very low.
    25 year old nightclub boss .....get real and Dad don't be a mug
  • Tali
    • #7
    • 17th Jun 09, 8:46 AM
    • #7
    • 17th Jun 09, 8:46 AM
    Of course not.
    • linda1955
    • By linda1955 17th Jun 09, 9:31 AM
    • 18 Posts
    • 4 Thanks
    linda1955
    • #8
    • 17th Jun 09, 9:31 AM
    • #8
    • 17th Jun 09, 9:31 AM
    No, children should not take advantage of their parents' natural desire to help them out. If Margaret can't get the money elsewhere, it's probably not a good business venture.
  • steam dan
    • #9
    • 17th Jun 09, 9:36 AM
    • #9
    • 17th Jun 09, 9:36 AM
    If Margaret has doubts about the business succeeding then she should not be doing it. You should only go into a business with the attitude that it WILL succeed and be prepared to do anything it takes to make it happen. Therefore she should not accept her father's generous offer.
    • Cloudane
    • By Cloudane 17th Jun 09, 10:34 AM
    • 499 Posts
    • 355 Thanks
    Cloudane
    NO.
    Never, ever, not ever, give a woman that much money.
    Originally posted by scotsbob


    No, even though he's obviously willing as a parent, she shouldn't allow him to put himself in that position where he could potentially lose his house. If you want to stand on your own feet and be all independent etc, do so properly. Otherwise - join the employees club with the rest of us chickens.
    • reluctantworkingmum
    • By reluctantworkingmum 17th Jun 09, 11:31 AM
    • 126 Posts
    • 115 Thanks
    reluctantworkingmum
    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'
  • chesilfan
    Money Moral Dilemma
    Absolutely not
    • LameWolf
    • By LameWolf 17th Jun 09, 11:37 AM
    • 10,867 Posts
    • 119,537 Thanks
    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.
    LameWolf
    If your dog thinks you're the best, don't seek a second opinion.
    • jeanmd
    • By jeanmd 17th Jun 09, 11:53 AM
    • 2,240 Posts
    • 25,037 Thanks
    jeanmd
    No. No. No. No. No! No argument - the answer is NO.
    Thank you to everyone who contributes to mse.

    "Discipline is just choosing between what you want now and what you want most" - Unknown Author
    • Cloudane
    • By Cloudane 17th Jun 09, 12:16 PM
    • 499 Posts
    • 355 Thanks
    Cloudane
    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'
    Originally posted by reluctantworkingmum
    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
    Would he sell?
    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!
    Last edited by RobinGB; 17-06-2009 at 2:31 PM.
  • 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
    • By catch22 17th Jun 09, 1:23 PM
    • 536 Posts
    • 252 Thanks
    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?
    Last edited by catch22; 17-06-2009 at 1:30 PM.
    catch22
    • 1998jjb
    • By 1998jjb 17th Jun 09, 1:56 PM
    • 11 Posts
    • 15 Thanks
    1998jjb
    No no no no no no no!!!
    No no no no no no no!!!
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