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Question for the Money Doctors

Question submitted on Jun 2, 2012.

Question

Is there a maximum amount of money that I can borrow from my own small business in a given year?

Answer

A lot depends on what kind of entity you have your business set up as. If it''s a sole proprietorship or a single member limited liability company, you can basically take out (or return) any amounts. If it''s a partnership, the partnership agreement has to be consulted as to whether you can take loans. If it''s a corporation, you have to be concerned that it will not be treated as a dividend, so you need to have a loan document that bears interest, with a repayment schedule.


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