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Richard, Attorney
Category: Business Law
Satisfied Customers: 55294
Experience:  32 years of experience practicing law and a businessman.
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I have a 501(c)3 religious radio station and I wanted to know

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I have a 501(c)3 religious radio station and I wanted to know if it is legal to borrow privately from individuals and offer to pay them back double when and if the radio station receives donations enough to pay them back?
Submitted: 6 years ago.
Category: Business Law
Expert:  Richard replied 6 years ago.

Good evening. This is going to run afoul of the usury rules and possibly put the lenders in position of being unable to collect the loans and/subject to other penalties.



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Customer: replied 6 years ago.
Is what you are saying that the usury laws would be against the lender in this situation?
Expert:  Richard replied 6 years ago.

Yes, the usury laws protect the borrower against usurial interest rates.

Customer: replied 6 years ago.
But is it illegal for me to borrow under these conditions....(last question)
Expert:  Richard replied 6 years ago.
You can borrow, but you don't want to put your lenders in the position where the loans are illegal....because then if you know this and don't tell them, you could also be sued. What you should do instead is to insert a usury savings provision that says the interest rate will be the lesser of what you suggest or the maximum interest rate allowed by law.
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