Issuing Promissory Notes from Individual to LLC

[Han T.]

Hi BP community! Hope all is well. Here is my question.
I would like to check if it is possible for a LLC to issue (borrow) promissory note to an individual for the purpose of buying real estate.

If so, can it be done with just any of the corporate templates found online or does it have to be approved/submitted/issued by some licensed or government authorities?

Lastly, if the LLC would like to borrow from foreign individuals/companies (whom have no EIN/ITIN/SSN), is the interest paid to these foreign individuals/companies tax-deductible? If so, how can it be done?

Let me know or please redirect me to the correct sites for further readings.
Happy Investing!

[Darius Ogloza]

There is no reason why an LLC cannot borrow money. Nothing is needed other than a standard promissory note. Now, finding someone to lend to an LLC without a personal guaranty is another matter unless the LLC is very well capitalized. I cannot answer the tax question definitively but I can't see any reason why the LLC could not deduct all interest it actually paid (regardless of the source) against investment income. Maybe if you were doing arms deals or something with the Ayatollah? I certainly stand to be enlightened if I am wrong about this.