Thirty-eight percent of small businesses are started with loans from family and friends. TrustLeaf has created a platform to help ensure those deals don’t go south. The company offers a web-based application that small business owners can use to draft airtight agreements when they raise funds from the people they love.
Common wisdom says to never mix money and family, but TrustLeaf hopes its custom agreements will ensure that everyone has the same expectations when it comes to lending—and receiving—money to start a new business. Create a funding campaign that includes specific information about how much you need to raise and how long you have to raise the cash. Your campaign should include detailed information about how long it will be before you can pay any loans back, and how much interest you’re willing to pay. Once your campaign is customized and complete, you’re encouraged to send a link to friends and family who’d like to help. People who want to pledge money can do so online, and they both parties will be prompted to sign a copy of the agreement you’ve drafted before any funds change hands.
TrustLeaf doesn’t exit the equation once contracts have been signed. The platform offers tools that business owners can use to track their loan payments and keep lenders up-to-date on the status of their projects. In the future, TrustLeaf hopes to provide online transaction capabilities, as well.
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