Business Debt/Investment in LLC

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Expert: - 10/17/2009


Question
Hi,
I just lost my job and was looking for some business opportunities.  I am talking to a used car dealership.  The company is LLC.  They invited me to invest some money into the company.  Basic concept is to buy some used cars using the money i will provide (lend) to the company.  Share the profit @50%.  
I like to be very sure to safeguard my money by putting the terms in writing.
My questions are:
Legally how safe it is to lend money to LLC.
is there special language I should include into the contract
what are my options if the company file for bankruptcy

There is another option to lend the money directly to the one of the partner in the LLC (as a personal loan).  is it a better option?

Thanks in advance
Jai


Answer
Jai:
Thanks for your question. I am not an attorney and can not comment on the legal issues you have addressed in your comments. I can only say that any investment of any kind is a risk.Depending upon how well you and your potential partners know the business they are funding and have a plan to execute, manage costs and make money - I would strongly caution you. My company has seen a spike in troubled companies in the industry which you are considering, this is due to less available funding for consumers to make purchases, especially large ones such as an automobile. If you truly intend an investment, seek out a legitimate business broker, that can find you a solid and profitable business in the area of interest and back you up by providing the appropriate advice when examining all areas of potential risk and rewards.

Respectfully,

Christine Janklow

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Christine Janklow

Expertise

As President of SettleSource,Inc. a business debt settlement firm, I invite you to inquire about all aspects of business debt solutions to best determine which may be most appropriate. If you have questions such as: What is debt settlement and how process provide debt relief to my business? What options are available to deal with my business debts? Is it possible for a business owner to negotiate their own settlements? Why is debt settlement preferable to filing a bankruptcy or debt consolidation? Why are creditors willing to provide settlements to a business? How will settling debts affect credit scores? or How to rebuild a business after debt is eliminated. Please ask it now! For more information regarding how debt settlement can help your business, please visit www.SettleSource.com and place your inquiry. Mention All Experts to have a confidential no cost consultation with Christine. If this is your business situation time may play a very important factor in getting matters resolved proactively before they have negative affects on the business.

Experience

My expertise is specific to providing business solutions that will have profound positive impacts on the financial health of businesses. I have 25 years experience as an entrepreneur and have developed national sales programs; strategic alliances; product development; marketing programs; business and turnaround plans and debt settlement programs all providing methods to improve the financial outlook for large and small businesses. In the area of commercial debt settlement I have over 10 years experience working with large and medium corporations and closely held businesses to enable successful debt reduction and turnaround. I am a professional debt arbitrator and have negotiated with major banking institutions as well as vendors, suppliers and other trade creditors.

Organizations
Provisors;Turnaround Management Association; Los Angeles area

Publications
Accounting Today; Web CPA; National Restauarant Association;Los Angeles Daily News; Today Magazine Monthly series of business articles entitled "Brand News."

Education/Credentials
Bachelor of Business Administration; Associate of Arts Merchandising

Past/Present Clients
American Airlines, American Express, Safeway Inc., New York Life, consumer products manufacturers; retailers, food service industry and other small businesses and service providers.

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