In most cases, friends and family are not the optimal sources of operating funds for any number of good reasons. But when you need small amounts of high-risk equity to start a business or to keep your business afloat, they are often the best sources. If they have the funds and believe in you and your business, they can act quickly when time is of the essence. This is just what you must have in a cash flow emergency. So, if your survival depends on it, ask your friends and family for precisely what you need to survive.
Make them a deal that you can live with and one you can follow through on. Allow enough time for you to actually develop the funds to pay them back or to buy back the stock issued. Do not make any promises that will be hard to keep in the next several years. (Distressed markets have an oversized element of the unknown. Both you and the person you are asking for funds should recognize this fact.).
Debt, in the form of a loan, may be the terms you use for discussion. Just know that these funds will be the equivalent of equity, since they will have no call on the company’s assets. Do not let anyone think you are making them a partner unless you really are, and they can contribute. You do not need the distractions and they do not need the heartache.