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Jan 08, 2018 5:07 pm
Hi Allan,
Is it possible for my corporation to loan money to a person who is not an employee or shareholder? If so, what terms and interest rate would be considered reasonable? Other than the risk of not getting paid back, are there any downsides from a tax standpoint?
Thanks and happy new year!
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Jan 08, 2018 5:08 pm
Yes, so long as the person receiving the loan is not a family member of the shareholder. Charge a market rate of interest and reasonable repayment terms. No downsides, other than the loan not being repaid.