How to go about helping family with business investments
Curious to see how people manage lending money to family when the amount is big. Scenario: I have in the past helped my family out with order of ~5-10k dollars every quarter or so multiple times over multiple years. It was always given like a gift with no expectation of return, so no love lost. But this is keeping their business floating and does not necessarily changing lives in long term. Now, I want to help them out in a bigger way. Say order of ~100k investment to help them start a new business or radically improve the existing business. How do people go about this? Any ideas on how to lend money to family and not add friction to personal relationships?
You just don’t.
If the business is losing money and needs new capital infusions every few months, it isn’t viable. Don’t throw more money after bad.
It might be better for them to get a business credit card or SBA loan. Then you help pay the interest instead. 8% -10%. So your 10k loan effective becomes 100k