Proposing loan payment structure for business use

[xXxJavierxXx]

Hi, i am looking to borrow money from either my relatives or friends to fund my business. I estimated to repay this sum of $$ fully in 3 years if the business turns out to be successful. Even it's not successful, i will find my means to return. I came out with payment scheme that allows me to return them the principal sum partially throughout the 3 years. I wonder if the interest accumulated is good enough to convince anyone to lend me this money. Any feedback? Thanks!!!

 

[kebinu]

too much high from your words. i won't lend you even if the interest rate is high. (assuming i'm your friend)

 

[DevilCurseYou]

effective interest rate (EIR) is a well defined term, referring to interest on an annual basis, accounting for the outstanding balance. calling the effective interest of your proposal as 18% is misleading. 7.5% is the EIR.

the saleability is for you to consider. we are in a world of buyer beware and is up to your friend to accept your proposal. you may want to consider EIR of credit loan that you are able to obtain from bank for such 3 years. Also, the EIR of student tuition fee loan is about 5%.

another point to note is that bank has greater access of information, and greater use of tools to recover money from you, and hence banks could afford to charge a lower interest for the default risk.

 

[focus1974]

Lending Money to a PERSON is not about How HIGH the interest rate is(unless I am ah long). It's about how confident you are of the person's ability to repay.

So, the thing you need to do is convince your relatives of the probability of the BUSINESS SUCCESS than to focus on the high interest rate.

 

[Callow Guy]

Since you will find the means to repay if the business fail... y dun you find the means to save up first b4 starting your business rather than borrowing from friends and relatives?

 

[xXxJavierxXx]

Since you will find the means to repay if the business fail... y dun you find the means to save up first b4 starting your business rather than borrowing from friends and relatives?

I do have a considerable sum of capital ready to dive in. Considering the capital outlay to sustain the operation for a period of 2 years, i am still short of the estimated amount.

Well, i could be saving up for a few more years. However, the opportunity will be lost. It's timing meets opportunity.

 

[xXxJavierxXx]

effective interest rate (EIR) is a well defined term, referring to interest on an annual basis, accounting for the outstanding balance. calling the effective interest of your proposal as 18% is misleading. 7.5% is the EIR.

the saleability is for you to consider. we are in a world of buyer beware and is up to your friend to accept your proposal. you may want to consider EIR of credit loan that you are able to obtain from bank for such 3 years. Also, the EIR of student tuition fee loan is about 5%.

another point to note is that bank has greater access of information, and greater use of tools to recover money from you, and hence banks could afford to charge a lower interest for the default risk.

Noted on the part on effective interest. Will make adjustment to the biz proposal. Thanks. Definitely will consider this option too.