How to borrow money from friends/family
I have a handful of friends and family members that are interested in lending smaller amounts ( <$5,000) for house flips and BRRRR deals. This cash could help with interest-only payments and down payments. I formed an LLC to flip out of and am curious how I can borrow this money so that I can show this as an expense or loan so that I don't have to pay taxes on it when I pull it out of the LLC. I am in Pennsylvania, and the usury laws cap interest on amounts less than $50,000 at 6%.
Do I need to have a promissory note or otherwise included with my receipts come tax time? I would rather not create a new LLC with 3+ people or have to put these folks on the deed for such small amounts, but I would like it to be legitimate. I am curious about how one should handle money borrowed from friends and family when they have a business.