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If you loan someone 20k for a business how much should U get back

L

LEs Stroud

Banned
I have a little internet business I started. My boy likes my ideas and products and wants to invest 20k for advertising and marketing. He understands hes not a partner, just an investor.

But I honestly dont know what a fair ROI is on his money. I figure 3 years should be the term to pay back. But how much profit should he make? double, three times, a percentage? I really dont know.

Good looking for any pointers

Is there a general rule?
 
Are you looking to pay him back in monthly installements or at the end of the 3 year term?

If the latter then I personally would want a higher return for my investment as it becomes more risky.

Personally I'd want at least 15%pa repaid in monthly installments....
 
charlie dark said:
Are you looking to pay him back in monthly installements or at the end of the 3 year term?

If the latter then I personally would want a higher return for my investment as it becomes more risky.

Personally I'd want at least 15%pa repaid in monthly installments....
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Thanks brugh. I think he believes hes going to make like 40k or better or it aint worth it. He mentioned if it aint atleast double he might as well not take the risk
 
LEs Stroud said:
Thanks brugh. I think he believes hes going to make like 40k or better or it aint worth it. He mentioned if it aint atleast double he might as well not take the risk
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Well which perspective do you want. As an investor or as the business owner ?

As a investor I will take 10% paid monthly and 20% interest in the company plus some means for me to get my money back if you fail. ie I get the business or your house or your car or something. How much I will want from you will depend on whether I can afford to lose all the money or not. I will need to see some ways of you paying back in increments. Whether it be from your job or from the business. The interest payments and ownership I will want will depend on how much I believe you can deliver. How quick I will want the money back is the same.

As a business owner I want to give you an interest in the company and we split the profits. That way you don't get paid unless I make money. But that's the ideal. I understand you have to give him something for him to want to give you the money.
 
kjxxxx said:
Well which perspective do you want. As an investor or as the business owner ?

As a investor I will take 10% paid monthly and 20% interest in the company plus some means for me to get my money back if you fail. ie I get the business or your house or your car or something. How much I will want from you will depend on whether I can afford to lose all the money or not. I will need to see some ways of you paying back in increments. Whether it be from your job or from the business. The interest payments and ownership I will want will depend on how much I believe you can deliver. How quick I will want the money back is the same.

As a business owner I want to give you an interest in the company and we split the profits. That way you don't get paid unless I make money. But that's the ideal. I understand you have to give him something for him to want to give you the money.
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Thanks for the Insight. It gives me some options
 
Use this to make personal loans between friends:
http://www.virginmoneyus.com/PersonalLoans/tabid/54/Default.aspx

* this link was not posted to help the potatoheaded op. It was to help any board member that enters the thread looking for the same or similar info.
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