I am funding the groundwork for a new future business by using my own after-tax dollars. I know that my money will be put to good use; that I will reap the benefits of the new business by owning it myself; and that I will be able to write off the expenses of the new business against future taxes.
However, I think I will still be "losing money" this way. For example, if I have to foot the bill for a capital expenditure, that expense can only be depreciated rather than written off immediately. And I just don't think that depreciation is going to fully compensate me for having put up after-tax dollars for this business.
I was wondering whether I could structur my personal gifts to my business as loans, with interest due to me at such time that the business starts making an income. This way I would get 100% return on my capital investment. I would have to pay taxes on the interest, of course, but I could presumably set the interest rate at a level that would make it palatable for me. (Currently I am paying 9.99% on credit card debt that I created to finance the business, and I doubt I could find a bank that would lend to me at less than say 12%, so I think a decent percentage repayment could be justified using "arms-length" rules.)
Is it possible to lend money to my business in this way? And would it be financially beneficial for me to do so?