What is your plan? Will you be paying the loans periodically? You can't have NO idea.
$95,000 loan from family
$28,250 small business loan from bank
All loans to be repaid in 10 years
I will use 30% of my budget ($123,250) to rent business space and pay for utilities. An investor has increased my budget by $18,250, and does not need to be repaid. Rather, he becomes part owner of my business.
Will the investor contribute enough money to meet the cost of rent and utilities? I need help with an equation or inequality that illustrates an answer. Thanks!
If my budget is alotted for rent is $36,975 (30% of my original budget of $123,250) and an investor increases my budget by $18,250 does the investor contribute enough to cover rent? I think the question itself confuses me. Should the 30% be figured after the investor contribution increases my original budget?
I would appreciate any ideas anyone has on turning this into an equation or inequality... Thanks much!!
You cannot just compare 36975 with 18250. You must first see what you are already able to pay and see if 18250 manages to make up the difference.
In order for you to see what you already are paying, there must be terms on the loans. To keep it relatively simple, let's ignore interest and repay annually.
Family Loan: 95,000 ==> Repay annually 9500 = 95000 / 10
Bank Loan: 28,250 ==> Repay annually 2825 = 28250 / 10
Budget Allotment: 36975 = 123250 * 0.30
Shortfall: 36975 - 9500 - 2825 = 24650
Investor Conribution: 18250 < 24650 -- You'll need another investor!
Note: These interest free loans are great! Where can I get one?