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    BHolmes's Avatar
    BHolmes Posts: 7, Reputation: 1
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    #1

    Jun 21, 2007, 04:48 PM
    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?
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Jun 21, 2007, 05:32 PM
    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.
    bhet's Avatar
    bhet Posts: 77, Reputation: 9
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    #3

    Jun 21, 2007, 07:32 PM
    The interst rate would be based upon the agreement of the involved parties.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #4

    Jun 21, 2007, 07:51 PM
    Good answer bhet
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