If you are contemplating loaning money from one business to another, family members, or a friend, there are some basic things to consider: How will you be paid back? When? What happens if they do not pay you back? And it should all be in writing! When in doubt, consult with an attorney to make sure the proper precautions are in place before agreeing to the loan. Check out the video below to learn more.
Often as business owners we get hit up to lend money either to help another business or help an individual, but you need to protect yourself and make sure that you have the ability to get repaid. The first piece of advice we give to everyone who’s looking at loaning money from one business to another or an individual is getting it in writing on how much you’re lending and how you’ll get paid back. Some of the other things to consider are how to attach collateral to the loan; such as putting a mortgage on real estate or having a security agreement for assets of value. These assets could include the title of a motor vehicle, deed to a property, or many other liquid assets. This way, in the occurrence of a business or individual’s inability to repay the debt, you have something to go after to recover the value of your loan and don’t have to write it off as a total loss.
If you have questions regarding loaning money from one business to another, family members, or a friend, or require assistance in drafting a legally binding contract, please contact the professionals at Allison L. Harrison Law, LLC by phone, (614) 440-1395 or via email at firstname.lastname@example.org to schedule a consultation with your experienced attorney in Columbus today.
Please note that the information contained in this article is intended for general informational purposes only and not as specific legal advice. The facts of your situation may differ from this general information. It is not intended to and does not in any way establish an attorney-client relationship. Persons and businesses do not become clients unless and until Allison L. Harrison Law, LLC agrees to act for them and that agreement is confirmed in a retainer agreement or other writing.