I am holding NRI status currently and would like to invest money in one of my friend’s mechanical workshop.
He has recently opened the same and already they are 4 partners.
- He requires 20 Lakhs for further purchase of machinery.
- I am thinking to lend him money for 5 to 10 years and expect some returns ~12 to ~15 %
I have following questions regarding above mention plan.
- Am I allowed to lend money for above-mentioned purpose?
- Is 12 to 15 % return is fair or am I asking for too much?
- which kind of legal documentation i have to follow to make sure he is having my 20 lakhs and suppose to pay me agreed amount yearly in returns.
- How should I mitigate the risk of loss?
Waiting for your response.
thanks in advance.