Antonio's dear friend Bassanio needs money to help him woo Portia, who Bassanio loves and wants to marry. Antonio is a wealthy merchant, but right now all his ships are at sea, bringing back the merchandise that Antonio will then sell at a handsome profit. Antonio has no cash at the moment to lend his friend, but Antonio wants to help him.
Antonio therefore approaches Shylock, a Jewish moneylender. We quickly learn there is bad blood between the two. Shylock, not surprisingly, resents Antonio's anti-Semitism and insults. Antonio, in turn, dislikes Shylock.
Shylock makes a bargain with Antonio to lend him the money. However, if it is not repaid within three months, Shylock will have the right to take a pound of Antonio's flesh from any part of his body. Shylock eventually plans to take it from his heart, which would, of course, kill Antonio. In those days, before modern, sophisticated ideas of sanitation or any antibiotics, cutting off that much flesh anywhere would probably be a death sentence. In any case, without painkillers, it would be a painful operation.
Antonio, however, is initially not worried. He has more than one ship out at sea and figures that at least one will return within three months.