The Promissory Note
A lender will almost always want you to sign a written promissory note -- a paper that says, in effect, "I promise to pay you $XXX plus interest of XX%."
While a friend or relative may be willing to lend you money on a handshake, this is a bad idea for both of you. It's always a better business practice to put the loan in writing, and to state a specific interest rate and repayment plan. Otherwise, you open the door to unfortunate misunderstandings that can chill your relationship. Also, you want to have documentation of the loan's terms in case the IRS decides to audit your business.
To learn about different repayment options and promissory note terms, read Understanding Promissory Notes.
Interest
State usury laws prevent lenders from charging illegally high interest on loans. As a general rule, a lender can safely charge you interest of up to 10% per year and not have to worry about violating this usury law. However, there's a lot of variation in usury laws from state to state, and different rules apply to commercial lenders and private lenders, so you should check your state's law if you're concerned. Look under interest or usury in your state's statutes.
If your corporation is taking a loan from a shareholder (including yourself), make sure the interest rate is not too low -- the IRS likes to see loans that are commercially reasonable. Otherwise, the IRS might consider the loan as a capital investment by the shareholder and treat the loan repayments as dividend payments to the shareholder.
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