Private lending Question

[Rob Wilcox]

Hello BP, My business partner and I are funding a short-term private lending deal. I’m using a personal line of credit to fund the transaction. I transferred from this line of credit account to our business account and then wired from our business account to the closing attorney’s escrow account. All of this seems in order. The question we have - can we bill the interest back to our LLC? This personal line of credit is at a cost of 5.2% that I currently have to pay on my own. Is there a way that I can charge this back to our LLC legally? Thank you in advance! Robert W.

[Wayne Bridenstine]

Best to talk to your Tax Accountant. However, should he say this is a legitimate deduction, then file a charge to your LLC to reimburse you for expenses paid. Just like an expense report that you would charge for business travel etc. to establish a legitimate separation between you as an individual and your LLC. I am not a tax accountant or attorney so this is just my opinion but should be enough to start a conversation with your Tax Accountant.