He was my coworker. I know him at work for years. It is unlikely he take money and run away. He ask me a loan to scale up his business, promised to pay 15% annually.
He said there is legit loan paperwork. His work is in manufactures industry, maybe B2B. He said he his business don’t depend on number of customer available.
I don’t know. I am a salary man. I know nothing about business and investment. I haven’t ask him into the detail yet. I know nothing about this type of business.
He seem confident, but I feel the 15% is so unlikely that will come with (hidden) risk. Maybe my friend is also a victim of another scam, or he just overconfident.
When someone offers you a guaranteed 15% annual return, your first instinct should be to pause and ask yourself a few key questions. The thing about investing is that every return, especially one that seems high, comes with risk. It’s like gravity in finance—returns and risks are always connected, no matter how confident someone seems.
Here’s the core of it: 15% is a lot, especially if you’re talking about something as stable as a loan to scale a business. In the investment world, anything offering more than 8-10% annually typically means there’s some risk hiding beneath the surface, whether that’s volatility, market dependence, or something specific to the business that isn’t obvious right away.
You mentioned your friend is confident. You’ve known him for years at work, so it’s understandable that you trust him on a personal level. But investing isn’t about trusting people—it’s about trusting the numbers. When someone offers you such a high return, especially from a business loan, your brain should be telling you, “There’s more risk here than I’m seeing.”
So why is your friend asking you, a coworker from the past, for money? That’s a question you have to seriously consider. If his business was solid, he would’ve gone to the bank first. If he’s offering you 15%, it’s because the bank, or any other legitimate lender, won’t give him a dime. That’s not something to take lightly.
The truth is, if the bank isn’t willing to loan him money, even at 15% interest, that’s a flashing red warning sign. They see something risky in his business that you, as someone unfamiliar with investment and business, probably don’t see. No matter how much you trust your friend, no matter how confident he seems, the risk is there, and it’s big.
Here’s the harsh reality: people tend to ask their friends for money when they’ve exhausted all their other options. If you loan him money, there’s a good chance you’ll never see a penny of it back.
Before making any decisions, ask your friend why he didn’t go to a bank or a professional investor. Ask him why he’s offering such a high rate of return. And if you’re still not sure, seek advice from someone who knows how to evaluate business risk. It’s not about doubting your friend—it’s about protecting yourself.
Remember: there’s always risk behind high returns. The question is, do you understand what that risk is, and are you prepared to lose that money?