NOTE: This document is intended to aid in raising the working capital

necessary to start a small corporation (either for-profit or not-for-profit) without

the time and expense of filing with the SEC. This is LEGALLY accomplished by
making the incorporator/founder legally liable for the note. Obviously, most
entrepreneurs won't be willing to do this, but if the amount is small enough that
the incorporators are willing to make themselves personally liable, this may be a
viable option for securing loaned capital from friends or family.

Introduction
Typical for-profit corporations obtain capital through three major ways. Sometimes the
incorporators will furnish the necessary capital themselves. More often, they will issue shares of stock
that allow shareholders to be partial “owners” of the corporation and receive their “share” of the
profits, losses, and dividends. Thirdly, companies often finance capital purchases through the use of
personal or bank financing.
As with any venture, necessary start-up and working capital is necessary for this endeavor.
Since we are a not-for-profit, non-stock corporation, we are automatically limited to the first and third
options listed above. Although the incorporators have supplied as much of their current assets for the
use of the corporation as is possible, they do not possess the resources necessary to have a stable and
proper start. We have formulated a plan whereby friends who believe in our mission can act as lenders
and receive interest at rates much better than savings accounts or CDs- and have the assurance that they
are helping the work of the Lord Jesus Christ.

Terms and Conditions

The incorporators are therefor soliciting and willing to accept personal, interest-only loans
totaling up to $______ in order to re-lend to the corporation in order that the corporation can make
capital purchases and to obtain working capital. The articles of incorporation, bylaws, business plan,
and financial statements prepared by management in accordance with GAAP will be available to
lenders upon request. However, the incorporators are personally liable for any loans. Therefore,
whether the business succeeds or fails, the borrower (incorporator) will still be held liable for the
note(s). The terms and conditions upon which we are willing to accept loans are as follows. The term
of the loan(s) would be up to one or two years depending on the will of the lender, the principal
amount, and the date of final principle payment. Interest would be assessed at a fixed rate of up to __%
APR dependent on the will of the lender. Interest will be assessed at the end of every calender quarter
according to the ending principal balance and pro-rated if the loan originated during the quarter. The
last interest payment will be due with the final principle payment and will be determined using the
simple-interest method according to the principle balance at the end of each day for the period of the
quarter during which the loan was still in existence. Dates of origination and termination for pro-ration
purposes will be determined by the date of original receipt of monies from the lender and the date of
the last principle payment by the borrower, respectively. Interest will be paid to the lender no later than
the 15th day of the month following the end of the calendar quarter during which the interest was
assessed.