Someone wanted to invest 30k into my landscape company for 5% return, now I’m not the smartest guy out there and someone is free to correct me if I’m wrong but shouldn’t that 5% be until the loan is paid off and not until I give the company up

Again I’m very new to this so I could be looking at this horribly wrong

  • crowntown785@alien.topBEnglish
    1·
    10 months ago

    Sounds like pref equity with a 5% coupon or could just be a 5% hurdle. If you need capital but don’t want to be squeezed by interest on bank debt you could structure this as PIK interest so it doesn’t require any service in the interim. Way too little info here to actually know what is being proposed though.