Irish Wedding News
04/08/2015
The study, commissioned by AXA Business Insurance revealed that when it comes to funding a business, 24% of small business owners will turn to their family or friends for finance. Others will ask their loved ones, but they are not always prepared for the additional emotional costs it brings.
For example, many respondents said that securing finance from someone close to them was easier than from a commercial lender, with 45% admitting they think they would benefit from interest and fee-free borrowing. A further 21% felt they could benefit from flexible repayments if borrowing from their nearest and dearest. However, 39% said they felt "uncomfortable" about asking loved ones for money for their business, while 63% said they felt guilty.
When it comes to borrowing capital for business, 63% of respondents said they had borrowed money from a parent, 30% from a partner and 14% from a friend. 11% confessed to borrowing money from a grandparent, with the same borrowing from a sibling.
While there are emotional costs for those asking for finance, the research also revealed the potential of an emotional burden for those providing the money. It found that loved ones could feel obliged or reluctant to hand over their money, but don't want to say, while arguments can also occur, especially if the business is going through a challenging time. Another potential factor, the study said, was if an individual's mum and dad offer a financial contribution, they may also think they should have a say in how the business is run. This isn't always welcome, though, causing tension.
In fact, one in 10 said they had fallen out with a family member from whom they had borrowed money. A further 15% of those surveyed said they worry about jeopardising their relationship.
Darrell Sansom, Managing Director at AXA Business Insurance, said of the findings: "They say that your business is your baby – so it makes sense you'd turn to mum and dad for help. And when you take into account the fact that a family loan is usually quick, flexible and interest free, it's often a wise choice.
"But debt is still debt and asking those closest to you for a loan could put a strain on the relationship, especially if the terms and conditions are not clearly agreed.
"Even the most solid relationships wobble when it comes to money so it makes sense to be sure that family finance really is the best option for you, and if it is, that you borrow money wisely and with clear understanding the hidden costs."
(JP)
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Emotional Costs Involved When Borrowing Money From Loved Ones Revealed
A new survey has revealed the emotional, not just the financial cost, associated when borrowing money from loved ones.The study, commissioned by AXA Business Insurance revealed that when it comes to funding a business, 24% of small business owners will turn to their family or friends for finance. Others will ask their loved ones, but they are not always prepared for the additional emotional costs it brings.
For example, many respondents said that securing finance from someone close to them was easier than from a commercial lender, with 45% admitting they think they would benefit from interest and fee-free borrowing. A further 21% felt they could benefit from flexible repayments if borrowing from their nearest and dearest. However, 39% said they felt "uncomfortable" about asking loved ones for money for their business, while 63% said they felt guilty.
When it comes to borrowing capital for business, 63% of respondents said they had borrowed money from a parent, 30% from a partner and 14% from a friend. 11% confessed to borrowing money from a grandparent, with the same borrowing from a sibling.
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While there are emotional costs for those asking for finance, the research also revealed the potential of an emotional burden for those providing the money. It found that loved ones could feel obliged or reluctant to hand over their money, but don't want to say, while arguments can also occur, especially if the business is going through a challenging time. Another potential factor, the study said, was if an individual's mum and dad offer a financial contribution, they may also think they should have a say in how the business is run. This isn't always welcome, though, causing tension.
In fact, one in 10 said they had fallen out with a family member from whom they had borrowed money. A further 15% of those surveyed said they worry about jeopardising their relationship.
Darrell Sansom, Managing Director at AXA Business Insurance, said of the findings: "They say that your business is your baby – so it makes sense you'd turn to mum and dad for help. And when you take into account the fact that a family loan is usually quick, flexible and interest free, it's often a wise choice.
"But debt is still debt and asking those closest to you for a loan could put a strain on the relationship, especially if the terms and conditions are not clearly agreed.
"Even the most solid relationships wobble when it comes to money so it makes sense to be sure that family finance really is the best option for you, and if it is, that you borrow money wisely and with clear understanding the hidden costs."
(JP)
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