Many people go through unstable periods when they’re setting up a new business or are facing steep completion from rivals. A burst of cash that’s well spent can help stabilize your company if the money is invested into the right areas, and many businesses owners choose to borrow money from family and friends rather that loan companies. There are some problems you can face should you choose to borrow money this way.
If you don’t spend the money you’ve borrowed in the right way, you may have friends of family members asking for a date when they’ll be paid back. If you’re unable to give them the money back your relationship may never be the same.
Having a friend or family member lend you money can mean they fell like they’ve done you a favour, which they have. They may then feel like they can have a say about your business sand how that money is spent. Be careful who you choose to borrow money form because they could interfere with your business, which is never a good thing.