Thanks all for your thoughtful responses. On 1/30/07, Whil Hentzen (Pro*) <[EMAIL PROTECTED]> wrote:
> So you're asking two questions... should you do this at all, and if so, > are the terms reasonable. Yup. > Door #2 sounds like a very bad idea. Being a minority shareholder is the > worst of all possible worlds. Yup. Been there, done that, couldn't afford the T-shirt. Not again. > The 1/3 now means you are getting some cash in your pocket, plus a tiny > bit of extra (vis-a-vis interest). If you've got the spare time, and > have a good gut feeling, it's kind of like sweat equity. It's a client who did well by me when times were better. This would be part-time; we (TR&A) have a half-dozen projects going at any one time, typically. Number of hours would be fairly limited, especially at first. > The prime + 3% doesn't seem particularly generous; I bet if you went to > a local bank and asked for a non-secured loan, they'd want more than 3%. Sure. This was the opening bid. Everything is negotiable. If I don't come back with prime + 11% I'll bet he'll lower his opinion of me. Maybe we'll end up at 7%. The "un-secured" part is the liability - he fails, I get nothing. There's motivation. Flip side, I need to believe in what he's doing. That may actually turn out to be the biggest question. > As far as 'should you do this at all' part, what's your gut say? After > 40 yrs in the biz, gramps, your gut is pretty wise. My gut's in a pickle jar at some med school by now, sonny. But thanks for the thoughtful advice. The client's a pretty good guy, so we'll try to see if we can work out a mutully-agreeable deal. Based on how negotiable he is, I think I'll have a better understanding if this is just an easy way to get free money or if this is "Obi-Wan, you're our only hope." 1. Working out the terms: some maximum renewal period, where we could refinance if mutually agreed, but cash due. 2. Fully finance the amount from the front end, not week by week. 3. Getting an attorney to draw up the agreement, once we're comfortable with it, to ensure we're not running into any usury laws. That's hard money up front, so the client will need to be willing to front that, too. -- Ted Roche Ted Roche & Associates, LLC http://www.tedroche.com _______________________________________________ Post Messages to: ProFox@leafe.com Subscription Maintenance: http://leafe.com/mailman/listinfo/profox OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
