Have been asked to loan money to my family business.

[spadekevin]

HI,

I am in my mid twenties and have been working at my families business for quite awhile now. Things have always been rather rocky but it has supported two families very comfortably. While I am still unsure of my future with the business (possibly take over or going my separate way), I have a decent amount of loyalty and responsibility to it.As of the last two years things are only looking better. Sale have been improving and things seem to be going well.However, in the last couple months the past has come back to bite us. These problems have come from poor management of money at times (which sadly I have very little power over guaranteeing wont happen again.)I have been asked to make a loan to the company. This is to pay something off that if it is not taken care off will result in the lose of the company. If this happens my immediate family (with who I live) and my cousins will most likely loose their homes and have to upend their lives.Up until this point I have been very uncertain as to if I want to continue with the business or do something else. This has forced me to make a very real decision. If I make the loan I devote myself quite a bit to the company. If I don't I will be forced to figure out a different carrier path.
Early on I took a pretty firm stand with myself being that I will never dip into my investments. Especially for business related reasons. However, since the issue has actually arrived I feel a bit less certain.
The amount of this loan will be roughly half of my total portfolio. It will only be from taxable account and not my roth.I am pretty lost with what to do. I would greatly appreciate any type of input that can be shared.

Please help.

I did not find the right solution from the internet.

References:
https://www.bogleheads.org/forum/viewtopic.php?t=76682
Learning Management Video

Thanks!

[jaguarsuk]

HI,

I am in my mid twenties and have been working at my families business for quite awhile now. Things have always been rather rocky but it has supported two families very comfortably. While I am still unsure of my future with the business (possibly take over or going my separate way), I have a decent amount of loyalty and responsibility to it.As of the last two years things are only looking better. Sale have been improving and things seem to be going well.However, in the last couple months the past has come back to bite us. These problems have come from poor management of money at times (which sadly I have very little power over guaranteeing wont happen again.)I have been asked to make a loan to the company. This is to pay something off that if it is not taken care off will result in the lose of the company. If this happens my immediate family (with who I live) and my cousins will most likely loose their homes and have to upend their lives.Up until this point I have been very uncertain as to if I want to continue with the business or do something else. This has forced me to make a very real decision. If I make the loan I devote myself quite a bit to the company. If I don't I will be forced to figure out a different carrier path.
Early on I took a pretty firm stand with myself being that I will never dip into my investments. Especially for business related reasons. However, since the issue has actually arrived I feel a bit less certain.
The amount of this loan will be roughly half of my total portfolio. It will only be from taxable account and not my roth.I am pretty lost with what to do. I would greatly appreciate any type of input that can be shared.

Please help.

I did not find the right solution from the internet.

References:
https://www.bogleheads.org/forum/viewtopic.php?t=76682
Learning Management Video

Thanks!

I don't think you need legal advice, I would say you need business consultancy advice as legally if you were to make this loan it would be a pretty straight forward directors loan.

If sales are up and the business is growing is there a possibility of business finance to cover the amount needed to be injected into the business? That way there would be no personal investment required, targeted growth should mean those in the business are focused and the repayment of a loan should be in the minds of those responsible for the previous financial mis-management to serve as a warning in future.

If it is an option that would allow the business to continue and you with it until such point you might want to go your own way as you have been considering.

Other than raising the capital alternatively the question of investment is only really one you can answer as it's you putting assets at risk.

[des8]

Looking at your other posts I have the impression you are based in the USA.
This happens to be a UK site and so is unlikely to be able to offer much appropriate advice, but best wishes anyway

[MIKE770]

even so = there has been so many family breakups by such actions, family business in trouble maybe even the bank will not help? warning = suspect?