Should I lend my kid money to start a business?

Usually the better question is whether they need the money at all, because most of the time the answer is no and the request is about something else.

Almost every business a kid can start has a way to test it before spending a dollar. A kid asking for two hundred dollars of equipment before anybody has said yes to a price is usually not facing a funding problem. They are facing an asking problem, and buying gear is the most satisfying possible way to avoid it. Equipment shopping feels like progress and produces no customers.

So the first move is the question: do you have somebody waiting on this, or do you want this? A kid can usually answer honestly if there is no preferred answer in your voice.

If demand genuinely exists, then a loan is reasonable, and the terms matter more than the amount.

Make it a real loan. Written down, with an amount, a repayment schedule, and what happens if it is late. Four lines. The paperwork is the lesson.

Let them do the payback math first. This costs two hundred, you clear twenty five a job, that is eight jobs before you are even. Do you have eight booked? Ninety seconds, and a kid who runs that calculation once will run it forever.

Hold the terms. A loan that quietly gets forgiven teaches that money owed is negotiable if the lender likes you. That is a genuinely bad lesson to install at thirteen.

Interest is optional at this size and mostly ceremonial. What is not optional is the repayment actually happening.

Two alternatives that are often better. Borrow or rent the equipment for one weekend, which answers whether the work is even pleasant. Or match what they earn rather than lending, so the money arrives after the proof rather than before it.