Can I put a cosigner of a business loan on payroll?
I am eligible for a business loan with a particular lender as long as I have a cosigner. I have a cosigner in mind and also want to use the business loan in order to put said person on payroll. Is this legal?
- EvaLv 52 months ago
I see all kind of red flags here. Does your co-signer understand that they are on the hook for the payments if you business goes belly up? Having that same co-signer as an employee may be difficult. That person is going to want to have a say in how you run your business since they want to make sure you're going to be able to make the loan payments. They aren't officially a partner, but you've sort of made them one. You might better try to go the SBA route and have the SBA guarantee your loan. It takes longer but it's better than having a co-signer. If this person is also a friend, it's even worse.
- A HunchLv 72 months ago
Why would the co-signer do this?