What’s SoKay Protocol?

SoKay Protocol is a proposed schema of socially acceptable rules and norms that provide behavioral guidance when one is lending and borrowing money with friends and family (hence, “FnF loans”).

The main purpose of putting forward such a Protocol is to install a healthy organic environment where people can use standardized and formalized methods and instruments to protect their interest in risky lending activities without jeopardizing current relationships.

SoKay Protocol 1.0 welcomes suggestions. Have thoughts? Let us know. We will acknowledge your contribution in the next version upgrade.

Our Protocol includes the following recommended best practices:

  • Lending and borrowing money between friends and family is just like any other loan and should be treated with the same degree of seriousness.
  • Lending and borrowing money between friends and family is a contractual obligation, which should be established and secured in a legally enforceable contract.
  • Friends and family loans are not free money. It can be free at the lender’s courtesy, but charging a reasonable interest, especially when the amount involved is sizable, is common and recommended.
  • Friends and family loans shall utilize the same protective instruments commercial loans employ to manage risks, such as taking collaterals, and setting late penalties and default clauses.
  • Friends and family are not banks. Loans made by friends and family are for temporary relief or special situations, such as medical emergencies. For long-term financing, one should seek professional lenders.
  • Late repayment is subject to penalties. Intentionally and delinquently avoiding repayment is subject to social and legal consequences. Laws apply to friends and family.