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Asking for Documents

Simply put, we have found the best way to tell your prospective borrower that you require the loan to be properly documented is by using a combination of these three points:

First: Without proper documentation there could be problematic IRS implications that come into play as it relates to gifts;

Second: It establishes a payment history for the borrow; and

Third: Without the documents, the loan simply could not be made.

Given these FACTS, in order to make the loan, the proper documentation is a must. 

Parents and others are often approached by their children, relatives or friends requesting loans to purchase a home or its furnishings or repair; an automobile; attend college or start a business.  Often they do make the loan without much hesitation or reservation.  If that loan is made in a vacuum, however, with a lender having no solid information about the borrower's ability to repay or overall financial condition, trouble often ensues.

Whether an unexpected bankruptcy is filed or payments simply cease to be forthcoming, without documentation and possibly collateral, the lender may be subjected to a problematic financial situation as a result.

When an entrepreneur seeks a loan from family or friends to start a business or to buy a building or rental properties, we understand the lender’s need to document the transaction, secure and memorialize it. facilitates that process by asking the right questions, then providing the right self help documents for your completion, which will mirror your agreement.  With the proper documentation, underwriting insights and recording of documents, if necessary, transactions are getting done!  And is helping real people succeed and flourish. We can even assist with payment processing as well. And we do it all without an abrasive adversarial complex setting and without disruption of the familial relationship.

We are facilitators, not lenders. You contact us when you decide to lend money to family or friends for their personal or business endeavors, OR when you are determining whether to lend the money.

Your situation may involve financial planning or wealth strategies; legacy planning or just plain growing your family's wealth. By utilizing, you gain the peace of mind that a social lending transaction is handled with more than a handshake, yet without abrasive and costly lawyers, which, due to high fees, could potentially kill a small deal.

A transaction facilitated through will receive expert service, be subject to a one time fee, and can include recording and/or any title fees involved.

The documents provided by will fully and accurately reflect the transaction initially shared with us through our More Than A Handshake Questionnaire.  With every document package, you tell us your deal through this valuable online tool. then emails you a checklist for your review and acceptance.  Each customer is agreeing at this point, that the loan structure in we are plugging into the documents correctly reflects the deal made between the parties. 

However, the credit and lending decision is solely the choice of the lending party. does not and will not underwrite, take accountability for or guaranty in any way, the repayment of any debt between the parties for which the company documents a transaction.  Credit quality is not an accepted responsibility by  Some loans will go unpaid.  There are numerous reasons for a debtor to fail to pay as originally agreed.  Therefore, never takes or accepts any liability toward the repayment of the loan. 

The customer agrees to indemnify and hold harmless,, any parent, sister and subsidiary companies and any individuals related to any of the entities by way of ownership, employment or contracting, from any loss related to a loan going unpaid by virtue of the debtor being unable or unwilling to pay its debt. warrants and represents only that its documents provided to its customers can be relied upon for their accuracy in reflecting the transaction initially shared with the company, due to the customer acknowledging the same. 


Income Tax Implications

NOTE:  Check with your tax consultant to determine the requirements in your situation as there may be tax implications for certain social, peer to peer, family and friend loans. This information does NOT contain advice on any local, state or federal tax issue.  Additionally nothing in this writing is intended or written to be used, and cannot be used for the purpose of  (1) relying on it as tax advise or (2) avoiding penalties under the Internal Revenue Code or (3) promoting, marketing or recommending to another party any transaction or matter addressed herein.  Contact your tax advisor/consultant for any and all tax matters. 

As a general rule of thumb, there are no interest rate tax ramifications for either the lender or borrower for loans of less than ten thousand dollars.  But you may be required by the taxing authorities to charge interest on loans greater than that amount.  When money is utilized for business purposes, interest can commonly be deducted when calculating profit on which income tax is paid. 

In general with the taxing bodies, if there’s a deduction on one side, there often must be revenue recognition on the other.  If the business deducts the expense, the IRS and state treasury authorities may seek out the income evidenced on the lender’s tax return.  So with interest-bearing loans, even at low rates, the lender, after conversing with its tax advisors, will normally have to declare the interest as taxable income if the borrower is deducting the expense in calculating its own taxable income.

In a dispute, a document package from protects each party from attempts to either misrepresent the original terms or to say they were ever amended.  And ultimately if the borrower is unable to repay the debt, the FamilyTreeLoans' documents could assist the lender write off the loss as bad debt for income-tax purposes. 

Visit the IRS web site and consult your tax advisor for more specific information. 

Thank you for choosing for your documentation needs and to Keep Your Money In Your Family.


Thank you for choosing for your documentation needs and to Keep Your Money In Your Family.