Q: How am I protected and is this something I should look into or is it too good to be true?
So a local small family owned business is asking for my help as a friend, they are offering a 50/50 partnership (technically less cause someone has a 25% share in their S-Corp business) for a cosign on a $30,000 loan that will save their business and bring it back into the green. They are offering $5,000 of the loan to go to me to pay down some of my debts and they state that I wouldn't have to pay anything back towards the $30,000 loan. But a cosigned loan means both party's are responsible. The reason for the loan is because they are behind on bills due to a break-in/robbery in December and insurance didn't pay out. The loan for them as they state will be used to pay off and catch up on the bills that are behind, they also state that they can afford the said loan payments cause it's cheaper per payment then what they are paying to catch up. As a 22 y/o trying to establish my future in CO is this too good to be true and what protects me if they default a payment?
A:
You can ask for collateral, like a stock pledge agreement, assignment of accounts, etc.
This type of transaction almost certainly requires an attorney to paper whatever deal is reached. The more complicated; the more it will cost.
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