New Business Help

[Mumtobeindistress]

Good evening everyone

I am newly pp with first baby. Currently in a situation where an immediate family member insisted my partner start his own business. Funds were agreed to be paid back as and when the business got up and running. A venue was secured on lease and all works and equipment have been commuted to, since having baby this family member has turned on us and is demanding the funds back even though there isn’t enough to pay for above commitments (family member aware of this) we are stuck because we need to move forward and try to open otherwise everything will be lost. A business loan isn’t an option because we are not trading yet. If anyone has any advice it would be worldly appreciated :(

Do you have anything in writing?

Nothing in writing it was all verbally agreed

I think you need to talk to a solicitor - it sounds horribly informal for what I'd imagine was a lot of money.

How come the relative insisted?

Family member when in a good place is the most caring giving person you could ever imagine. They insisted that it would be amazing for our futures and came with so many ideas etc my partner moved forward in good faith and now everything has collapsed and we don’t know how to move forward as we do not have the funds personally to do so

I think there's a lot of very relevant backstory and details that would need to be gone over to understand the situation and suggest where to go from here. I'm guessing you may not have the funds for a business mentor or a professional business adviser. Most will give you at least one or two conversations for free, you could approach your local LEP/Chamber to see if they can point you at someone. The MentorsMe website has a list of advisors that can help - but be aware that the website is very out of date so some of the contact details may not be current

There's a puzzle of how someone can insist someone else starts a business. Then whether or not the loan and repayment terms were formalised and documented.

You could look at a start-up loan, but that depends whether or not you have something to secure it against.

What sort of business is it?

It is a very complicated situation. Family member wanted us to have something of our own and to make successful for our future, they came to us with venues and plans and was involved in everything until this turn of events. everything was discussed in good faith and on trusting terms. We insisted on having a document drawn up for the conditions around funds to be paid back with interest but family member again insisted “just as and when” we never thought we would now be in this situation. If we stop now all money will be lost and no one has anything to gain from that but they have completely cut us off and have been exhausting all options

It sounds very stressful to be that beholden to someone, especially if they are unpredictable like this. If you aren't going to suffer financially, I would walk well away.

Running a business is stressful enough without this in the background. And until that money is paid back, you're never going to be free of it.

We contemplated walking away but my partner has signed contracts that he won’t be able to get out of and if we walk away all money that has been put into it so far is lost.

It feels like an impossible situation and we have tried our hardest to talk to the family member on a logical level and leaving personal upset aside but it didn’t help

Congratulations on your pregnancy op. I am sorry that you are going through this stress.

I could be totally wrong but is this a rural business by any chance?

If so, I can quite easily understand how this happened. The person lending you the money obviously hadn't thought in enough detail or far enough ahead at all as to the potential paths of how this arrangement could potentially pan out.

You need to get in touch with a professional mediator. Choose one carefully that has all the professional accreditations and recommendations. Sell your clothes on Vinted to afford it if you can. It will be worth it to resolve this awful situation that you find yourself in. Very best of luck to you.