Under both North Carolina law and the relevant federal tax rules, you can generally use borrowed money only to pay for “capital costs” of a project. What’s a capital cost? The primary rule I quote to clients, which comes out of the tax regulations, is that a cost is a capital cost of a particular project if it is a cost related to acquisition, construction or improvement of a capital asset, or is a cost directly related to putting that capital asset into service. A capital cost is different from a “working capital,” or an “operating” cost; these terms include both expenditures related to things other than capital assets, or on costs related to maintaining a capital asset.

When you get ready for a loan closing, there will be documents to sign – maybe a loan agreement and a deed of trust, maybe some bond forms, and a variety of certificates about certain facts. Someone has to sign these items. Who should it be? That generally depends on the answer to another question –

Is the document some kind of contract between the unit and someone else, or is it a certificate that’s supposed to be stating facts?