E90Post
 


 
BMW 3-Series (E90 E92) Forum > BIMMERPOST Universal Forums > Off-Topic Discussions Board > Co-signer for Business Loan - Help



Reply
 
Thread Tools Search this Thread
      07-12-2013, 07:33 PM   #1
SHEEDI
Lieutenant Colonel
 
SHEEDI's Avatar
 
Drives: 2009 335i - Sport PKG
Join Date: Jun 2009
Location: NY

Posts: 1,645
iTrader: (0)

Garage List
2009 BMW 335i  [4.67]
Question Co-signer for Business Loan - Help

Hello,
One of my close Friend runs a business and he has applied for business loan on the behalf of his business,not on the behalf of his credit. He is asking for favor to sign for his buniess loan as co signer. I am bit scarred. I have few questions. you guys might help me here to decide to help him or not.

1. What are my obligations if he is unable to pay loan or pay loan on time.
2. What are Pros and Cons if I sign as a co signer.

Your thoughts/inoput will be much appreciated.

Thanks
__________________
SHEEDI is offline   United_States
0
Reply With Quote
      07-12-2013, 07:51 PM   #2
j_marinelli
Private
 
Drives: 2008 135i
Join Date: Aug 2012
Location: San Antonio

Posts: 90
iTrader: (2)

Quote:
Originally Posted by SHEEDI View Post
Hello,
One of my close Friend runs a business and he has applied for business loan on the behalf of his business,not on the behalf of his credit. He is asking for favor to sign for his buniess loan as co signer. I am bit scarred. I have few questions. you guys might help me here to decide to help him or not.

1. What are my obligations if he is unable to pay loan or pay loan on time.
2. What are Pros and Cons if I sign as a co signer.

Your thoughts/inoput will be much appreciated.

Thanks
Dont do it unless

A: you have faith in his business
B: you have some sort of "shares" in the business. IE: profit
j_marinelli is offline  
0
Reply With Quote
      07-12-2013, 07:59 PM   #3
SHEEDI
Lieutenant Colonel
 
SHEEDI's Avatar
 
Drives: 2009 335i - Sport PKG
Join Date: Jun 2009
Location: NY

Posts: 1,645
iTrader: (0)

Garage List
2009 BMW 335i  [4.67]
Quote:
Originally Posted by j_marinelli View Post
Dont do it unless

A: you have faith in his business
B: you have some sort of "shares" in the business. IE: profit
Thanks for input. I didn't ask to do it or not to..my questions are

1.What are my obligations if he is unable to pay loan or cant pay loan on time?
2. Would it effect my credit history?
3. What are Pros and Cons if I sign as a co signer?
4. If I sign as co -signer,After few months can I take my name off as co signer?
__________________
SHEEDI is offline   United_States
0
Reply With Quote
      07-12-2013, 08:18 PM   #4
jlstyle
Major
 
jlstyle's Avatar
 
Drives: E92 335i
Join Date: Jun 2008
Location: nj

Posts: 1,317
iTrader: (0)

Quote:
Thanks for input. I didn't ask to do it or not to..my questions are
1.What are my obligations if he is unable to pay loan or cant pay loan on time?
You are liable, and it will affect your credit if you are not able to make payments on his behalf.

Quote:
2. Would it effect my credit history?
No, unless it becomes your liability and you aren't able to pay the loan for him.

Quote:
3. What are Pros and Cons if I sign as a co signer?
There's no pros for you but cons if #1,2 become your problem.

Quote:
4. If I sign as co -signer,After few months can I take my name off as co signer?
No.
__________________
09 E92 335i Coupe
Jet Black/Coral Red/Sports Pkg/Prem Pkg/Cold Weather/Navi/PDC/Ipod/6MT
jlstyle is online now  
0
Reply With Quote
      07-12-2013, 10:23 PM   #5
amanda hor$t
Banned
 
Drives: a380
Join Date: Sep 2012
Location: ny ny

Posts: 208
iTrader: (0)

i'm reminded of charlie sheen in wall street. meaning he's potentially looking for a fall guy
amanda hor$t is offline  
0
Reply With Quote
      07-12-2013, 10:46 PM   #6
NemesisX
Captain
 
Drives: '08 335i
Join Date: Jul 2009
Location: TX

Posts: 873
iTrader: (0)

Quote:
Originally Posted by SHEEDI View Post
Thanks for input. I didn't ask to do it or not to..my questions are

1.What are my obligations if he is unable to pay loan or cant pay loan on time?
2. Would it effect my credit history?
3. What are Pros and Cons if I sign as a co signer?
4. If I sign as co -signer,After few months can I take my name off as co signer?
1. You have to pay. You're just as responsible for the loan as he is if you co-sign

2. Sure. If he can't repay the loan and you can't repay it your credit history will absolutely be affected.

3. There are no pros. You would be extremely foolish to co-sign his loan unless you're really good friends with him and you wouldn't mind repaying 100% of the principal + interest if it comes to that. Sure, it probably won't come to that, but you have to be prepared to do that.

The only "pro" is your friend will be a very happy person.

4. No. Once you sign, it's a done deal.

Even if you get shares of his business (which in and of itself is a tricky business where you have to read the fine print), I still wouldn't do it. The vast majority of small businesses fail.
NemesisX is offline  
0
Reply With Quote
      07-13-2013, 12:48 AM   #7
Nkc
Captain
 
Nkc's Avatar
 
Drives: E89-Z4 35i, E36-MZ3, E82 1M
Join Date: Oct 2011
Location: Vancouver/Hong Kong

Posts: 662
iTrader: (0)

Loans need a co-sign for a reason. If they didn't need one, they wouldn't need you to sign. Pretty simple stuff. Simple advice in life, any thing you sign, you are most likely liable for or relieving liability from others.
__________________
E89 Z4-35i DCT --- E36-Z3 M-Roadster --- E82-1M
Current BMW's
Nkc is offline  
0
Reply With Quote
      07-13-2013, 02:16 AM   #8
iBoost
Brigadier General
 
iBoost's Avatar
 
Drives: real slow
Join Date: Nov 2009
Location: Las Vegas

Posts: 3,039
iTrader: (12)

If all these posts haven't already helped you determine your decision then I don't know what will.
iBoost is offline  
0
Reply With Quote
      07-13-2013, 09:03 AM   #9
SHEEDI
Lieutenant Colonel
 
SHEEDI's Avatar
 
Drives: 2009 335i - Sport PKG
Join Date: Jun 2009
Location: NY

Posts: 1,645
iTrader: (0)

Garage List
2009 BMW 335i  [4.67]
Thanks guys. I am not doing it.
__________________
SHEEDI is offline   United_States
0
Reply With Quote
      07-13-2013, 09:10 AM   #10
BayMoWe335
Major
 
Drives: 2010 E92 335i 6MT
Join Date: Aug 2009
Location: US

Posts: 1,387
iTrader: (0)

Was this a serious question?

"You're a moron of you start a business on loan."

- Mark Cuban
BayMoWe335 is offline  
0
Reply With Quote
      07-13-2013, 10:46 AM   #11
MrRoboto
Colonel
 
Drives: VO 1M
Join Date: Aug 2007
Location: Canada

Posts: 2,711
iTrader: (0)

Quote:
Originally Posted by BayMoWe335 View Post
Was this a serious question?

"You're a moron of you start a business on loan."

- Mark Cuban

Seemed to work for Apple.

Nothing wrong with using someone else's money so long as the plan is solid and it is executed properly.
MrRoboto is offline   Canada
0
Reply With Quote
      07-13-2013, 11:21 AM   #12
dreamingat30fps
Captain
 
Drives: 2009 335i (RIP) - 2006 Z4MR
Join Date: Jan 2010
Location: South Florida

Posts: 896
iTrader: (1)

Quote:
Originally Posted by MrRoboto View Post
Seemed to work for Apple.

Nothing wrong with using someone else's money so long as the plan is solid and it is executed properly.
I love anecdotal evidence.

I will see your "It worked for Apple" and raise you a "It ruined my buddies life he's now 50 years old living in his parents apt".
dreamingat30fps is offline   United_States
0
Reply With Quote
      07-13-2013, 12:52 PM   #13
amanda hor$t
Banned
 
Drives: a380
Join Date: Sep 2012
Location: ny ny

Posts: 208
iTrader: (0)

Quote:
Originally Posted by dreamingat30fps View Post
I love anecdotal evidence.

I will see your "It worked for Apple" and raise you a "It ruined my buddies life he's now 50 years old living in his parents apt".
depends how it's done. personally i would borrow only as a last resort. i've done the payments/loans life and living cash is much better imo.

don't spend money you don't have... even people in h.s. knew that
amanda hor$t is offline  
0
Reply With Quote
      07-13-2013, 06:17 PM   #14
MrRoboto
Colonel
 
Drives: VO 1M
Join Date: Aug 2007
Location: Canada

Posts: 2,711
iTrader: (0)

Quote:
Originally Posted by dreamingat30fps View Post
I love anecdotal evidence.

I will see your "It worked for Apple" and raise you a "It ruined my buddies life he's now 50 years old living in his parents apt".
Can you elaborate on your buddies business plan a bit?
MrRoboto is offline   Canada
0
Reply With Quote
      07-14-2013, 12:19 AM   #15
schoy
Private First Class
 
Drives: Melbourne Red E90 M3
Join Date: Apr 2010
Location: SD

Posts: 126
iTrader: (0)

Quote:
Originally Posted by dreamingat30fps View Post
I love anecdotal evidence.

I will see your "It worked for Apple" and raise you a "It ruined my buddies life he's now 50 years old living in his parents apt".
Have you ever heard of project financing?
schoy is offline  
0
Reply With Quote
      07-14-2013, 07:29 PM   #16
persian54
Lieutenant General
 
persian54's Avatar
 
Drives: SL550. Prev: E93 M3/335i/Z435i
Join Date: Jun 2009
Location: The Valley, SoCal

Posts: 15,797
iTrader: (291)

Quote:
Originally Posted by BayMoWe335 View Post
Was this a serious question?

"You're a moron of you start a business on loan."

- Mark Cuban
just sign, and if things go south, file for bankruptcy lol at least you didn't lose your cash haha
persian54 is offline   United_States
0
Reply With Quote
      07-15-2013, 09:47 AM   #17
Maestro
Captain
 
Drives: 2007 335i Sedan
Join Date: Nov 2006
Location: Philadelphia

Posts: 880
iTrader: (0)

If the guys needs a co-signer for the business loan it means the business does not have the finances to back up the loan. Banks will cut a loan for a business if they been doing business for a while, and can show cash flow as well as some sort of contract for future business. The other thing Banks will allow is putting personal assets up as collateral. Is sound like this guy has neither so he needs someone who have this to back his loan up.

From a credit history stand point, if you co-sign the loan it will show up on a credit check as an outstanding liability you have. Similar to a second mortgage on your home.

Even if they person does not default it will be counted against you in your overall credit rating.

Last edited by Maestro; 07-15-2013 at 11:37 AM.
Maestro is offline  
0
Reply With Quote
      07-15-2013, 10:43 AM   #18
Templar
Lieutenant Colonel
 
Templar's Avatar
 
Drives: 2011 E92 M3
Join Date: Feb 2009
Location: One of the coasts...

Posts: 1,817
iTrader: (1)

Garage List
2011 BMW M3  [5.00]
Quote:
Originally Posted by bosster hymen View Post
depends how it's done. personally i would borrow only as a last resort. i've done the payments/loans life and living cash is much better imo.

don't spend money you don't have... even people in h.s. knew that
Or in your case, if mom and dad have it you're good.
__________________
'11 BMW E92 ///M3 - ZCP and DCT
'13 Toyota Tundra - 4x4 Platinum CrewMax, 5.7l iForce V8
Templar is offline   United_States
0
Reply With Quote
      07-15-2013, 11:46 AM   #19
Undertow
Private
 
Drives: 2011 E93
Join Date: Sep 2010
Location: Boston

Posts: 68
iTrader: (0)

Run away. Nope. Never. No.
__________________
2011 E93 M3 | 2014 M235i
Undertow is offline   United_States
0
Reply With Quote
      07-15-2013, 12:14 PM   #20
Mr Tonka
Tonka.... Mr. Tonka
 
Drives: Exceptionally well :)
Join Date: Feb 2009
Location: Tampa, FL

Posts: 1,183
iTrader: (0)

Quote:
Originally Posted by BayMoWe335 View Post
Was this a serious question?

"You're a moron of you start a business on loan."

- Mark Cuban
Says the guy giving out money for business start ups. Obvously not free money.

From Mark's stimulus blog....
Quote:
11. If you do get money, it goes into a bank that I specify, and I have the ability to watch the funds flow and the opportunity to require that I cosign any outflows.
12. In your business plan , make sure to specify how much equity I will receive or how I will get a return on my money.
__________________
-Joe


"Government is the great fiction, through which everybody endeavors to live at the expense of everybody else." — Frédéric Bastiat
Mr Tonka is offline   United_States
0
Reply With Quote
      07-15-2013, 04:27 PM   #21
badazzm
Lieutenant
 
badazzm's Avatar
 
Drives: RRS GT2
Join Date: May 2012
Location: San Jose, CA

Posts: 543
iTrader: (1)

Never do business with friends. Always ruins friendships.
badazzm is offline   India
0
Reply With Quote
      07-15-2013, 10:19 PM   #22
N55
Major
 
Drives: 2012 335IS E92
Join Date: Nov 2010
Location: Pittsburgh

Posts: 1,221
iTrader: (1)

Garage List
Absolutely NO!
__________________
2008 335xi E90 Alpine White - Sold - 8/19/10 > 2011 335xi E90 Jet Black - Sold - 6/27/12 > 2012 335IS E92 Crimson Red - Current

N55 is offline   United_States
0
Reply With Quote
Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -5. The time now is 06:21 PM.




e90post
Powered by vBulletin® Version 3.7.0
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
1Addicts.com, BIMMERPOST.com, E90Post.com, F30Post.com, M3Post.com, ZPost.com, 5Post.com, 6Post.com, 7Post.com, XBimmers.com logo and trademark are properties of BIMMERPOST