Multiple PML's sharing 2nd position

[Suzanne Griffiths]

We are putting together 2nd position funding for a project. We have 3 people that are willing to lend a portion. My understanding is that the cleanest way to do this is create an LLC where each person's ownership percentage is based on the percentage of the whole investment they put in. The LLC is then the name on the mortgage deed in 2nd position. One person has asked if this would cause the interest payment to then be classified as business income versus a personal investment return.