First-time entrepreneurs and business owners in the beginning stages of their business may have limited access to start-up business funds.

A small informal loan from an aunt or a formal low interest loan from a friend might not be enough to get your business off the ground, but it can help. And several loans from a variety of friends and family members can do a great deal to boost your business.

Friends and family may be one of the few possible avenues for funding available, and often financing from people you have good relationships with can be on very appealing terms. Friends and family may not require that you pay them back on a fixed schedule, and may generally be more flexible about paying interest. Plus, loved ones will generally require less detailed information from you because you've already established a level of trust with them.

Procuring funds from friends and family isn't necessarily a sure thing. Many have known you all their lives, and as a result, have probably made up their minds about whether or not they're willing to give you funding before you've even asked or thought you might need it. That said, it's still critical that you present your business goals in a professional and succinct way. A professional presentation can go a long way in swaying a friend or associate to financially invest in your plan, and may influence a family member to invest a greater sum of money. It's critical that you enhance your position by showing that you're deliberate in your intentions-that you have thought through your goals and objectives and are taking your business plan seriously.

Seeking out friends and family members as investors can also be useful for an established business experiencing a financial crisis. You may have already exhausted institutional resources, and are in need of a short-term financial patch. Because you have pre-established relationships with your friends and family, obtaining funds quickly may be easier than going through a lengthy bank loan process or vetting out angel investors.

Keep in mind that entering into financial agreements with friends and relatives can be a stressful and potentially disastrous endeavor. Family relationships and friendships have been destroyed by small business loans gone bad, so consider your ability to take on the loan and your business' viability before asking your loved ones for funds. And make sure that your friends and relatives understand the risk they'll be taking on before money changes hands.

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