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Lending money to help friends business

(23 Posts)
Teaplease2 Thu 05-Oct-17 20:31:27

Someone I know needs to get rid of their business pronto. They have offered to sell the business to someone else for £1.
Or should I say the lease for the business. But the fixtures, fittings and stock still need to be paid for.
She is needing £20K to cover this.
Me and my brother have that money and she's offered us shares for 33% of the LTD company. The thing is - its moved so quickly that there isn't a company set up yet therefore no shareholders agreement but she needs the money on Monday or the deal falls through.
Is there any way to protect ourselves in terms of the money those things aren't in place?

Any advice greatly appreciated

ShotsFired Thu 05-Oct-17 20:33:34

Don't do it.

Run away with a massive bargepole between you.

Steer well clear.

That sort of advice.

SpinDry Thu 05-Oct-17 20:37:31

Who is the third person in this (the one who has the lease) do you know them? Will you vacate the property with all the fixtures and fittings and stock leaving the third person with the lease of property? Why the urgency/why does she need to sell by Monday?

MyBrilliantDisguise Thu 05-Oct-17 20:44:09

Please don't do this. You'll lose every penny.

AfunaMbatata Thu 05-Oct-17 20:46:43

Stay away. It’ll all end in (expensive) tears .

Teaplease2 Thu 05-Oct-17 20:58:36

Thanks for your replies, have to agree my gut is saying to not get involved, but I also want to help my friend out if I can and if there could potentially be a return for me.

The person buying the £1 lease needs the 20k to buy the stock etc to keep the business running and has been given until Monday to decide/pay or the business will be sold to someone else.

SpinDry Thu 05-Oct-17 21:05:13

Dodgy dodgy dodgy. Avoid like the plague!

Notanothergiraffe Thu 05-Oct-17 22:34:39

Another steer clear vote here, sorry.

A limited company can be set up in a day, often in a few hours. But you would be well advised to get any shareholders’ agreement looked over carefully by a solicitor before signing and giving money.

If the company went bust you do know your friend could walk away and not repay you a penny as it would be the company that either owed you money or that you had invested in?

It’s a lot of money to risk OP, do be careful.

MyBrilliantDisguise Thu 05-Oct-17 22:35:41

Just re-read it. Please don't do this.

Appuskidu Thu 05-Oct-17 22:36:36

Why would you even consider this?!

NC4now Thu 05-Oct-17 22:37:45

Don't do it. Not unless you're happy lose 20k.

ChicRock Thu 05-Oct-17 22:53:21

Why would anyone with half a brain buy into this?

Handing over 20k for a LYD company that doesn't actually exist, it's got to be done by Monday, so no chance to write up a contract, get solicitors involved etc.

Some people are so fucking gullible they deserve to be conned.

Hey OP I know a Nigerian Prince who's had his savings account containing 20 million pounds frozen by the bank, he just needs someone to send him 20k, it'll allow him to access his savings account and he'll give you 100k back in return. Shall I PM you his bank details, he needs the money transferred by Monday. hmm

Lonecatwithkitten Fri 06-Oct-17 07:35:59

Any investment into a business should be carefully thought out with time to read over accounts see business plans etc.
This is too rushed, why does it have to be sold so fast, does anyone actually know if it makes any money.

Fosterdog123 Fri 06-Oct-17 07:51:30

Big fat NO from me too!

Trills Fri 06-Oct-17 08:03:35

If the business needs getting rid of quickly and is being sold for £1 there's a good chance the new owner will also fail to make a go of it.

HellsBellsnBucketsofBlood Fri 06-Oct-17 08:11:15

Keep clear.

Ghostontoast Fri 06-Oct-17 10:09:50

Someone along the line is scamming to get their mits on that 20k.
No no no no no

MyBrilliantDisguise Fri 06-Oct-17 11:48:07

I don't like the fact that she knows you can afford to do this. You're being used, OP.

Hereward1332 Fri 06-Oct-17 13:43:56

Echoing everyone else - don't do it. It smells off.

What evidence is there that the stock etc is worth £60k? If it's worth less you're being ripped off. If it's worth more (and it should be given this appears to be a fire sale) why is the current ownder not disposing of it and closing the business.

Only giving you a limited time to assess is not the mark of someone genuinely trying to sell a business. It's the mark of someone pushing you into buying something for more than it's worth.

Creampastry Fri 06-Oct-17 13:51:42

No way! You would need to review the accounts at the very least.... but run away!

ZippyCameBack Fri 06-Oct-17 13:54:32

There isn't one single part of what you wrote that doesn't scream "Scam!".
First of all, why the urgency to get rid of the business? Then, your friend wants you and your brother to take all of the financial risk, but only retain a third of the shares (of a company which appears not to exist). Then, she wants the cash now and not after the paperwork is all sorted, and certainly before you have time to get legal advice.
There are so many things here that could come back and bite you on the bum, the only question is, which one will happen first?
Either the current owner is scamming your friend (assuming the business definitely exists), or your friend is scamming you. Either way, this cannot end well.

Guardsman18 Fri 06-Oct-17 14:12:11

Please, please don't give her the money. Why Monday? You need more time surely to look at things than that. I would bet my house that you will never see that money again (and I love my house!)

Justaboy Fri 06-Oct-17 14:22:58

1. Never risk more then you can afford to loose.

2. Well normally you'd look at this very closely first.

3. Have a look at it but change the shareholdings so you who are risking the money have control over it.

4. Is it a business that you'd like to be involved in?

5. Why the urgency that doesn't bode well.

Having said thet i took a firm over at the beginning of the year it was run by a real muppet and was losing money hand over fist but i got it for what most peoples credit card limit is. Was offered a Million for it a month ago so sometimes it can work but are you that experienced in business and do you know what your doing and does your mate that's the Alan Sugar type questions I'd ask you!

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