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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 4009
Experience:  Providing Financial, Tax & Business advice since 1986
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If I purchase a prepaid card and lend it to someone, can I

Resolved Question:

If I purchase a prepaid card and lend it to someone, can I charge interest ?
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.

NPVAdvisor :

Yes, what you wold be doing in effect is making a loan ... (As a matter of fact, technically, the IRS would say that you should charge at least a low market rate)

NPVAdvisor :

What you really should do is draw up a promissory note

NPVAdvisor :

The card, then is just a way for that person to acces the fund (would be like a revolving line of credit for them)

NPVAdvisor :

Hi,

NPVAdvisor :


 


 


PROMISSORY NOTE: General form to document a promise to repay a debt

$ _________



_________ [date of making]


___________________ [place of making]



For value received, I, _________, of _________[address], _________[city], _________ County, _________[state], promise to pay _________[to the order of _________ or to _________ or order] at _________[address], _________[city], _________[state], _________[designate time payable, such as: _________ months after date without grace or on _________(date), or if payable on demand, on demand] the sum of $_____, _________[with interest at the rate of _________% annually].



[Signature of maker]

NPVAdvisor :

This would suffice

NPVAdvisor :

I still don't see you coming into the chat ... I'll move us to the "Questions and Answer" mode ... Sometimes that helps ... (We can still continue a dialogue there, just not in real-time as we can here)

NPVAdvisor :

Let me now if you have questions on this

NPVAdvisor :

Lane

Expert:  Lane replied 1 year ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
Expert:  Lane replied 1 year ago.

Hi Jamal,

just checking back in, as you were never able to come into the chat.

Let me know if you have other questions on this.


Lane

Customer: replied 1 year ago.

Would I need a license to do this repeatedly with others ?

Expert:  Lane replied 1 year ago.

I would check with your local municipality about any licenses they require, but it WOULD be a best practice to set yourself up as a business and report the income ((and expenses) on a schedule C.

 

 

That way you can deduct any legitimate expense of running your business. And if you really start to grow, you might want to consider registering with the state as an LLC, which will protect your personal assets from any business creditors or lawsuits.

 

 

Hang on a minute and I'll check Georgia to see if a license is required for the lending itself ... as would probably be considered micro-lending, my guess is that you would have to register with the banking authorities.

 

 

Be right back

 

Lane

Customer: replied 1 year ago.

Thanks, XXXXX XXXXX waiting

Expert:  Lane replied 1 year ago.

While looking I DID notice that what are called "payday loans" are prohibited in GA.

Still checking

Expert:  Lane replied 1 year ago.


I would call these folks ... in the list of businesses they regulate they use the word "lenders," so they can tell you (1) whether a license is required (and what paperwork is needed) or (2) whether there may be an exemption, based on this being personal a loan possibly being under a certain volume.

Department of Banking and Finance
2990 Brandywine Road
Suite 200
Atlanta, GeorgiaNNN-NN-NNNNbr/>
Phone:(NNN) NNN-NNNNbr/>Toll Free:(NNN) NNN-NNNNbr/>
Here's their web site: http://dbf.georgia.gov/



I also checked the GA secretary of state's licensing board and there is nothing listed for lenders:

http://www.sos.georgia.gov/plb/FAQ.html



Do you have feel for the market here (how many loans you might be taking about?)

It's very possible that as a few personal loans this would not be regulated.

Lane
Customer: replied 1 year ago.

Up to 10


 

Expert:  Lane replied 1 year ago.


I think you'd be safe then just labeling them as personal loans.

What you really should do, however, is be sure that the promissory note is in place and ...

(probably stating the obvious here)

Be ready to go through the collections process, (which, in GA, you can do by filing with the magistrates court in your county),

You might also consider going to one of the really cheap sites like rocketlawyer or findlaw and filling out the form that will ensure the promissory not will hold up in GA - they will give you an instruction sheet that says how many signatures are required and whether a notary is required, etc.

http://www.rocketlawyer.com/form/promissory-note.rl

http://www.lawdepot.com/contracts/promissory-note-form/?loc=US

mccrarylawyers.com/promissorynoteblank.doc‎



Lane
Expert:  Lane replied 1 year ago.

Hi Jamal,

... just checking back in, as I never saw you come back after that last answer.

If you have more questions let me know.

But if this HA been helpful, Id appreciate a feedback rating of 3 (OK) or better. That's the only way they'll pay us here.

Let me know,
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 4009
Experience: Providing Financial, Tax & Business advice since 1986
Lane and 5 other Finance Specialists are ready to help you
Expert:  Lane replied 1 year ago.

Thanks much for the rating Jamal!

If I can help further let me know.

If you'd like to work with ME again just say "For Lane only," at the beginning of your next question.

Thanks again,
Lane

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