Thread: Lending Money.....

Hi, has anyone here owned a company lending money before?

What needs to be done in order to be legit?

What process do you take to ensure yourself of not getting stiffed?

What can you do if you get stiffed?

Any practices/lessons learned?

Why would anyone use me vs a credit card?


I was doing this for a while with friends and family and it worked great, i got stiffed hard one time though but still enough up on the + return.

I would like to retry this, i can advertise relatively cheap and i figure i would give out loans to people based on a $500-$2,000 to start. I will have them back this loan up with a physical asset they own to ensure me getting money. I can use my own cash or get investors to use theirs if it grows fast. I have heard of people charging some pretty high rates, does anyone know the maximum % allowed?

Cash is definitely king these days. To learn about small amount asset based lending visit pawn shops. They have the most experience. Note, they take the collateral upfront! Very important.

I have dabbled w/ friends and family and it is a no win situation. Their problems become YOUR problems, even if you have a solid agreement. Often you have to press hard to get paid and that can destroy relationships.

Keep it at arms length, get a good agreement and get possession of the collateral up front.

Remember as a lender, your real leverage is BEFORE you open your wallet. After the money is gone you really have no leverage. Try to sue someone who has no money.

I'm interested in the small business financing area where CIT group's sweet spot was. Financing orders/receivables. CIT group screwed up by getting into riskier stuff like rail/airplane leasing and risky mortgage securities.