vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"One thing I would add to TTT's answer: One of the benefits of using an LLC for your business is right there in the name - ""limited liability"". It provides a level of protection for your personal assets should your business go bankrupt, get sued, and so forth. However, if someone can show that there's no real separation between your LLC's activities and your personal activities, then they can ""pierce the corporate veil"" and go after your personal assets. If this loan is really purely personal and not related to your business activities, you may create a paper trail that can later be used in this way. My advice would be to just avoid the whole thing and make the loan from personal funds. I don't see any upside to doing this out of the LLC funds."
Short answer: yes, you can put up collateral for someone else's loan. The bank will be happy to take your money, give it to the other person, and return it to you on completion of the loan (keeping the interest the security makes on the money market and the interest they're charging the other person for themselves). If the above doesn't sound very appealing (you don't see any benefit from your investment, and can be left holding the bag if your friend defaults on their loan), it really isn't a great way to spend your money. However, as assistance to someone else, it provides several advantages over directly transferring the money:
Stock issuing and dilution is legal because there must be some mechanism for small companies to grow into big companies. A company sees a great investment opportunity.  It would be a perfect extension of their activities ... but they cannot afford it. To get the necessary money they can either take out a loan or issue shares. Taking a loan basically means that this is temporary, but the company will go back to being small when the loan is paid back. Issuing new shares basically means that the Board means that this growth is permanent and the company will be big for the foreseeable future. It is utterly necessary that companies have this option for raising cash, and therefore it is legal. As detailed in the other answers, you end up with a smaller percentage of a larger company, usually ending up with more or less the same value.
Real loans are forgone consumption, like a savings account. In real terms, you can loan only when you put aside something from consuming it. Any kind of monetary tricks and expansion cant create real savings out of thin air, only an illusion of savings like in economic bubbles: the idea - banking system getting money first creates illusion of more credit being available than what savers are actually putting aside so the seeds for an unsustainable bubble are sewn.
There is a fundemental misunderstanding:   the business and the owner are not the same entity.  You said:   I give the business $25,000 and take 50% of the business. No you can give the owner of the business 25K, and now he has 25K and 50% of a 50K business.   That 25K sits in Mr. Smith's bank account, not Acme Widget's account.   A more simple example is when you buy a car.  The money goes to the car dealership, it does not get put into the car's glove box. You may be thinking of an investor in a business.  He could pump $$ into the business as operating capital for a share of the business.  In that case, it would be a bit unfair to get 50% of the business for a 25K.  However, the owner may be interested in doing such a deal because value of the investor can add more than just $$ to the business.  Having a celebrity investor might do more good for the business than the actual dollars. Another situation is that the owner might be desperate.  Without a influx of cash the whole business might end. There are guidelines to business evaluation, but valuing them is not an easy thing.
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It's generally considered a bad idea to take a loan from your 401k, for the following reasons: You don't earn returns while the money is out You pay the loan back with after-tax money It's only considered a good idea for emergencies or where you need the money to pay off high interest rate debt like credit cards. Consider the stability of your employment, the expected rate of return and explore other avenues for funds  Source: MSN Money
It depends on the loan contract if this is even possible, and also if it is the default.  Banks of course prefer to use those extra payments against ‘future payments’, meaning you are giving them interest-free money upfront, to apply against your next requirement payment. That is of course very bad for you, as you do not only save no interst, but also lose the cash-flow. Most (but not all) contracts do allow prepayments, but many require you to explicitly specify that you want the extra applied against the principal.
"There are quite some options, but without additional information, I can only provide examples. Last year I had the option to buy a house, but I decided against it because in my area it is getting harder and harder every year to sell it at a reasonable price. But if I had bought a house, my mother would have lent me the money, with me paying it back to her over the years on 3% interest. So it would have been some kind of a private loan. But my mom would never have taken ownership of the house, since it was not her intention to own it in any way. (Does your dad intend to own the house and rent it to you? If yes, and if you are comfortable with renting instead of buying, then this is an option.) The second option, the one we discarded because of the additional cost, is that I could have taken a loan, paying 4.5% interest to the bank, which would then pay under 1% to my mom, and keep the rest. Banks always want to make profit, and this profit has to come from somewhere - from the difference between the interest rates. If your dad has 230k on the bank, and you owe 230k to the bank, you are better off if you keep the bank out - at least as long as your dad is comfortable with lending you money, and you are comfortable with owing him money. (my gf would never borough money from her mother, because her mother would always play the ""you are in my debt"" card - on each and every visit, and whenever she needed help in any way...) So the key is: What does your dad feel comfy with - and what do you feel comfy with. If possible, keep the banks out, but set up a written contract between you and your dad."
You walk into the finance company with a written quote from the supplier for the equipment you want to buy. You then fill out forms and sign a promissory note. The finance company then writes out a check to the supplier for the amount of the quoted equipment. Usually you need to provide at least 3 things: They will require you to provide your social security number and sign a document allowing them to check your credit history which they will look up using the social security number. Note that banks will generally give better rates on a personal loan than a finance company. People usually only use finance companies when their credit is so bad that a bank will not loan them money. Heating and cooling companies that provide equipment will often loan the money to buy that equipment. As a point of advice, it is generally poor financial management to take out personal loans and may indicate a person that is wasting money or be in financial difficulties. For personal loan items (furniture, cars, clothing, jewelry, etc) you are far better off saving money to buy the item, not borrowing beyond your means. If you need a new furnace and it is an emergency, for example, if it were winter (which it is not) and your furnace could not be repaired, then that might justifiable. But borrowing money at a high rate to just upgrade a furnace or get a luxury like AC is unwise.
The standard approach is to reach an agreement and put it in writing. What you agree upon is up to you, but in the US if you want to avoid gift taxes larger loans need to be properly documented and must charge at least a certain minimal interest rate. (Or at least you must declare and be taxed upon that minimal income even if you don't actually charge it. Last I looked, the federal requirement was somewhere under 0.3%, so this isn't usually an issue. There may also be state rules.) When doing business with friends, treat it as business first, friendship second. Otherwise you risk losing both money and friendship. Regarding what rate to charge: That is something you two have to negotiate, based on how much the borrower needs the money, how much lending the money puts the lender at risk, how generous each is feeling, etc. Sorry, but there is no one-size-fits-all answer here. What I charge (or insist on paying to) my brother might be different from what I charge my cousin, or a co-worker, or best friend, or... If both parties think it's fair, it's fair. If you can't reach an agreement, of course, the loan doesn't happen.
"Your plan as proposed will not work, because it goes against how banks make money. Banks make money in two ways:  (1) Fees [including account fees, investment advice fees, mortgage application fees, etc.]; and (2) Interest Rate Spread. They borrow money for x%, and they lend it out for x+y%. In a simple form, someone gives the bank a deposit, and earns 1%. The bank turns around to the next person in line and loans the money to them for 4%. You are asking them to turn the interest rate spread into a cost instead of their main source of profit: You are asking the bank to borrow money from another person paying them 1.2% interest, and then loan the money to you, paying you 0.6% interest and keeping 0.6% for themselves. The bank would lose money doing this. Technically yes, you can borrow from a bank and invest it in something earning above the 4% interest they will charge you. You can then pay the bank's interest off of your earnings, and make some profit for yourself. BUT this carries an inherent risk: If your investment loses money, you still owe the bank, effectively increasing the negative impact of your investment. This tactic is called ""Leveraging""; you can look it up on this site or on google. It is not something you should do if you do not fully understand the risks you are taking on. Given that you are asking this question, I would suggest tactfully that you are not yet well informed enough to make this sort of investment. You run serious risk of losing everything if you over-leverage (assuming the banks will even lend you money in the first place)."
The loan is private, so the business is more of a red-herring. The fact that you're closing it and lost a lot of money explains the loan, but is rather irrelevant otherwise as the loan is personal. Do consider potential tax benefits on writing off a loss, talk to a local tax adviser on that. Pros: Cons: I'm sure there are more considerations, of course, and I'm not familiar with the Canadian social safety nets to understand how much of a damage con #1 would be.
One lender's explanation of getting permission to rent out.  The implication is that it is straightforward with a 1% extra interest to pay.  However, there is no guarantee that permission would be given, so there might be a risk. http://www.nationwide.co.uk/support/support-articles/manage-your-account/letting-your-property/letting-your-property-overview Definitely renting out a property with a residential mortgage is not a good idea.
"There are 2 and 3 family houses that have an ""owner occupied"" clause for certain financing. Of course, one would rent out the extra apartments without question.  The key thing is that owner-occupied means just that, occupancy for tax purposes. Just using a small area like an office won't satisfy the requirement, so no, this isn't legal."
"The confusion comes from ambiguity in popular belief -- that businesses are required to accept x_y_x as payment. In reality, a business can state the terms of a transaction to their pleasure. On the other hand, debt is different -- no lender can refuse cash or other legal tender for repayment of debt. Sometimes, people try to split hairs and argue ""Well, if I eat a steak and I owe the restaurant $100, they should have to accept my $100 as tender for the debt of my meal."" Not true. The restaurant isn't giving you a line of credit, they're billing you after services rendered, and your payment is due on their terms."
No It's not a loan. It's an equity investment. Think of it as a business. The parents bought 75% of the equity with $115K, and are entitled to 75% of the sale proceeds, should you someday liquidate the business (i.e. selling the house). The $500 per month is just business revenue and is paid to your parents as a dividend. Imagine you rent it out to your self and charge a $666.66 rent - you take 25% of that back and give your parents the rest. Like any equity investment, the risk for them is that if the value of the house goes down, they will have to shoulder the loss.  And you are right, there is no way to build equity. You already sold that to your parents.
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"Generally, banks will not lend to ""rental"" LLC's, you'll have to cosign the loan personally. So for that matter LLC has no benefit. Paul mentioned the ""due on sale"" clause that is present in most current mortgage contracts and may trigger a call on your mortgage. Talk to your bank about it, in some cases you may be able to convince them that the ownership didn't in fact changed (since the same people are full owners of the LLC), but they may not buy it. If your bank allows it, you can transfer it into LLC and still enjoy the limited liability as an owner, but if not - you can get liability protection via insurance policy. In some cases that may even be cheaper. Talk to your insurance agent. In any case, deciding which (if at all) entity to use is a legal issue. You should talk to an attorney licensed in your State. There may be some tax considerations also, so talk to your tax adviser. In many cases, married couple jointly owning real-estate can skip the general partnership tax returns, but not with LLC."
A bank isn't going to offer to lend you money on a property you don't own.  You first need to finish the process of probate and get a clear title.  Then it's your house and a bank with lend you money based on a combination of your income and the home's value.
I've been to one of these seminars:  a) you can get a loan of up to $700,000 from the company and only have to pay a fixed amount for the use of money, but you have to pay the loan off in nine months.  Or b) you can just invest say $50,000 and you'll get a return of say 4%.  But what the company does is take all of the investor's money and use that to fund the loans (putting none of the company’s money at risk), and that fixed amout sounds reasonable until you realize that it's only for a part of the year so the real APY is actually much higher than the conventional lending rate; or the rate they are paying the investors.
what are my options for raising the funds? Assuming you have decent credit, you can either mortgage your home or apply for a land loan in order to purchase the land. Since both your home and the land have value, either one can act as collateral in case you default on your loan. Land loans tend to have a higher interest rate and down payment, however. This is because banks see land loans as a riskier investment since it's easier for you to walk away from an empty plot of land than your own home.
Banks can't simply make loans in the void. This is how the cash flow works, generally:  1. Depositers *add* cash into the bank. The Bank now has cash. 10% of that cash is held on *reserve* per law. This cash is held on the balance sheet as an *asset* (cash) *and a liability* (demand deposits).   2. Someone requests a loan. The loan is funded from the non-reserved cash of these deposits. This results in a lessening of an asset (cash), and the creation of a new asset (loan).  3. Traditionally, as the debtor pays back the loan, the interest is distributed in some sort of split between the bank and the depositors. This means cash in from the loan and interest, and a liability (deposits) also go up.  4. Alternatively, while the above still happens, the bank can *securitize* the loan and sell that to investors. Investors then get access to the loan and its income, and the bank collects a fee. However, this means more cash on hand for the bank to originate additional loans without going near the reserve requirement.   If a bank extends too many loans and its reserve is threatened, it must borrow either from the fed or from other banks. These loans must be paid back.
Some lenders will make loans for vacant land, others will not. You have to discuss with local bank what are your plan for the land: live in the old mobile home; install a new mobile home; build a new house; Sell it to a developer; use it for camping... Is the property part of a development with other mobile homes? If so there may be complications regarding the use and rights of the property. Some local jurisdictions also want to eliminate mobile homes, so they may put limitations on the housing options.
Awesome info, this is what I was looking for. I live in FL so i will look into LLC laws. Is there a difference in obtaining loans for multi-unit properties, or any special requirements? This would be my first purchase so I'm trying to decide if I should start with a multi-unit or a large home. I read something about a first time home buyers and the FHA allowing one to put down less of an initial investment. Im assuming this is if you are actually going to be living in the home or property?   Would it make sense to have separate entities for specific types of units? For example One separate corporation per multi-unit property, but have multiple single family homes under another single entity?   Thanks for the help.  *quick add-on, would you know how long the corporation would have had to exist before being able to obtain a loan? For example, would XYZ, LLC. have to have been around for 3 years prior to the loan, or could i just incorporate the month before going to the bank?
Many mortgages have a clause saying the bank will not sell the loan. You are acting like this is unheard of, but it is a standard checkbox on most bank's mortgages, where they either mark that they can sell it or they mark that they won't. So, it is common enough for it to be on their standard forms. (There are many sources of funding for banks for mortgages that explicitly prevent them from selling loans)
"You won't be able to sell the car with a lien outstanding on it, and whoever the lender is, they're almost certain to have a lien on the car.  You would have to pay the car off first and obtain a clear title, then you could sell it. When you took out the loan, did you not receive a copy of the finance contract?  I can't imagine you would have taken on a loan without signing paperwork and receiving your own copy at the time.   If the company you're dealing with is the lender, they are obligated by law to furnish you with a copy of the finance contract (all part of ""truth in lending"" laws) upon request.  It sounds to me like they know they're charging you an illegally high (called ""usury"") interest rate, and if you have a copy of the contract then you would have proof of it.  They'll do everything they can to prevent you from obtaining it, unless you have some help. I would start by filing a complaint with the Better Business Bureau, because if they want to keep their reputation intact then they'll have to respond to your complaint.   I would also contact the state consumer protection bureau (and/or the attorney general's office) in your state and ask them to look into the matter, and I would see if there are any local consumer watchdogs (local television stations are a good source for this) who can contact the lender on your behalf.  Knowing they have so many people looking into this could bring enough pressure for them to give you what you're asking for and be more cooperative with you. As has been pointed out, keep a good, detailed written record of all your contacts with the lender and, as also pointed out, start limiting your contacts to written letters (certified, return receipt requested) so that you have documentation of your efforts. Companies like this succeed only because they prey on the fact many people either don't know their rights or are too intimidated to assert them.  Don't let these guys bully you, and don't take ""no"" for an answer until you get what you're after. Another option might be to talk to a credit union or a bank (if you have decent credit) about taking out a loan with them to pay off the car so you can get this finance company out of your life."
"Wouldn't be advisable, it's not a bank account. However, some plans have emergency ""hardship"" provisions. Some that I'm familiar with would  only be allowable if you are ineligible for a loan. Some of the reasons are purchase of a primary residence, college expenses, funeral costs, or to prevent eviction. Hope this helps."
If someone owns a house that is not paid off...can someone buy it by taking another mortgage? Yes, but I'm not sure why you think the buyer would need to take another mortgage to buy it. If someone sells their home for X dollars, then the buyer needs X dollars to buy the house. How they get that money (use cash, take out a mortgage) is up to them. During the closing process, a portion of the funds generated from the sale are diverted to pay off the seller's loan and any leftover funds after closing are pocketed by the seller. What kind of offer would be most sensible? I assume that in this case the current owner of the house would want to make a profit. The amount that the house is sold for is determined by the market value of their home, not by the size of the mortgage they have left to pay off. You make the same offer whether they own their home or have a mortgage.
It depends on the terms of the mortgage. Generally speaking, residential mortgages specifically prohibit letting out a property without the bank's express permission -- but as you say, that tends to assume that the whole property is being let, not just a part of it. Conversely, buy-to-let mortgages generally prohibit living in the property yourself! The final arbiter as to what is allowed under a mortgage is the mortgage provider; so the safest option is to speak to one or more banks, and see what they say. (Note that if you're changing the use of part of a property from business to residential, you may need to apply for permission; check with your local council.)
"There are many flaws with your idea. Say I want to borrow $225,000.00 to accrue interest on a 1.20% APY   account. I promise ... that I cannot withdraw nor touch the   account by legal contract. If you break the contract and lose the money, the lender is out the money. They can take you to court and will win, but if you don't have the money, then they don't get paid. (You can't squeeze water out of a rock even if a judge orders you to.) By sharing the interest with me on a loan, they keep a percentage that they'd normally get... If you're ""investing"" the money at 1.2%, and the lender gets some amount less than that, then they are getting much less than they ""normally"" get. Lenders typically get somewhere from 5-15% on loans. The money can also be used to fund a stock/trading account. Regardless of whether I profit, I pay interest on the loan and split the profit shares 24/7. How can the lender lose with legal enforcing? Again, if you lose the money, no amount of legal enforcing can force you to pay money that you don't have. Even if you go to jail for fraud the lender still doesn't get paid. Simply, no bank would ever agree to this."