Pay-off for guaranteeing a business loan??

[toecurler]

I haven't worked for 9 months so have had to look at some different options....
I am guaranteeing a loan for £140 000 for a friend of mine who is opening a new restaurant....
We need to agree a contract between ourselves regarding the cash I will receive for taking the risk with providing security for the bank....
What do people think is a reasonable reward for my part of in providing cover for the business?

[itallhelps]

Cash is king. 50% at least.

[Mark Snowdon]

you need to negotiate

I think you need to take a view about the likely success of the venture.

Most restraunt businesses go bust. They use up loads of cash setting up and never manage the profit margins to repay the capital outlay.

You say you are guaranteeing it - who is the loan from and what insurance options do they offer ? what would your liability be ?

If they need a guarantor that implies that they are not too struck on the chance of success.


I wouldnt do it unless you have money to burn.

[NamesFacesPlaces]

Re: you need to negotiate

Restaurants are the most likely businesses to go bust.

80% of them go bust in the first 2 years.

Good Luck

[Alf W]

Re: you need to negotiate

Just say 'No'!

[BobHope2]

don't be so hasty

wouldn't dismiss this completely out of hand. If the restaurant in question is called McDonald's then I wouldn't "just say no."

Hell, I'll put up the money if that were the case

[NOTiFY]

Re: don't be so hasty

Even McDonalds are not doing well, they're closing "restaurants" and changing the format.