My friend has an established mfg. company. He recently bought out his partner and is looking for capital to expand.

He approached myself and another individual with a proposition so that we could get a business loan for $100,000. Even though neither one of us would own any stock, we would sign attorney reviewed contracts agreeing that we have full access to the books and would split all the profits evenly in thirds.

If my friend decides at the end of the fiscal year to reinvest the money in the business instead of paying us out, would these contracts give us any legal recourse?

Thanks,

Tom