You've got your business plan written or a startup business already in motion. Now all you need is the funding to get it off the ground. But with small-business loans never easy to come by--and credit markets more stringent than ever--you may be wondering exactly how you're going to get the money to start or grow your business.

It's common for entrepreneurs to borrow from a family member or friend. Of course, that can be complicated. You may not feel comfortable being in a loved one's debt . . . and your loved one may worry about whether she will ever see that money again. What's more, problems that might arise can cause rifts that may be difficult to discuss or repair. Many people feel it isn't worth the risk of damaging a personal relationship, so they never approach a family member or friend for financing.

That's why I wanted to share a resource I recently learned about--one that formalizes, to some degree, loans between family and friends. It's available through Virgin Money, an offshoot of the Virgin brand (Virgin Records, Virgin Airlines) started by well-known billionaire Richard Branson.

Instead of, say, a brief conversation and a flimsy verbal promise to pay a loan back, Virgin Money documents the loan, helps you establish an interest rate (if there is one) and records a repayment plan. This can make loans among friends or family more feasible.

Branson said an experience from early in his career inspired him to create the service. When he was struggling to get Virgin Records off the ground, his Aunt Joyce gave him a small loan that kept the recording studio afloat. The loan gave him the time and resources he needed to make his business a success. All these years later, he says, loans between friends and family are still close to his heart.

I'm sure Aunt Joyce would be astounded today by what her initial investment has grown into. But how can this program help you approach your own Aunt Joyce . . . or Aunt Sue, brother Joe or best friend Kate?

Here are a few ways that Virgin Money can help:

1. It can help you customize a letter to friends and family proposing a loan. Perhaps you'd like to ask five people for a relatively small amount of money, rather than ask one person for the entire loan amount you need. This feature can help you start the conversation about a social loan. This service by Virgin Money is free.
   
   
2. Once you get some nibbles from your e-mails, letters or visits with prospective lenders (i.e., your family and friends), Virgin Money helps formalize your loans with one of two plans: the Handshake Basic or Handshake Plus.
   
   Handshake Basic ($99) "takes away the assumptions of an informal agreement and replaces it with clear expectations," which increases the chance of repayment. This plan gives you the essentials, from a promissory note to a repayment schedule.
   
   With Handshake Plus ($199), Virgin Money also manages repayment by enabling electronic fund transfers, sending e-mail reminders and providing online account access and year-end reports. And to make cousin Jimmy more comfortable about giving you the loan, Virgin Money will even provide a third party who'll call if you're late on a scheduled payment.

Virgin Money promotes its service for all types of personal loans (e.g., a college student who needs tuition money or a newly married couple needing a down payment for a house). To me it seems ideal for business startups because it adds a professional element to the quest for personal loans. That makes all parties to a loan feel more secure about the arrangement because it helps avoid miscommunications, establishes clear expectations for the cost and repayment of the loan and helps preserve the personal relationship.

It also arrives in time for an economy that isn't exactly credit-friendly.

What's more, personal loans that are treated like traditional commercial loans can be beneficial to both parties involved. Borrowers obtain a loan at a much lower interest rate than the traditional bank or credit card route, and lenders invest their money in something they believe in (you!)--and maybe make a little money themselves in the long run.