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Home > Business & Careers > Accounting   »   Interest on loan from officer of company

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Old Jun 21, 2007, 03:48 PM
BHolmes
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Interest on loan from officer of company
If an officer of a company loans the company money, how should the rate of interest on this loan be calculated? At what rate?

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Old Jun 21, 2007, 04:32 PM   #2  
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The interest should be no more than current market rates.

If the company can go get a bank loan at 5%, then they should not be borrowing this money from the officer at more than 5%

But it is all very subjective and will vary based on the type of company, the type of people involved, etc.
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Old Jun 21, 2007, 06:32 PM   #3  
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the interst rate would be based upon the agreement of the involved parties.
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Old Jun 21, 2007, 06:51 PM   #4  
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Good answer bhet
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