USA How to pay self in a family-owned LLC from the borrowed funds

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vpougatchev

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I have a small startup LLC owned by my family. We received an SBA loan and going to use it to create our new product by paying ourselves. We usually paid ourselves as draws from earnings converted into capital contributions. However, the loan is a liability and cannot be used as capital. What is the best way to use the funds from a liability account to pay ourselves and how should it be taxed?
 
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