Legal Question in Business Law in Washington

Re: promissory note - is double return legal

Yes, you are correct, a 100% interest rate is too high for a loan, which would include a promissory note. You would find the interest rate to be unenforceable. I would have to do more research to determine whether the contract would be enforceable at all (I suspect it would but can't guarantee it) but I think you have confirmed what you know in your gut. This is not a good bargain for either one of you.

Why does he want to pay such a high interest rate? If you both are trying to find some way to help him in his business that you also feel comfortable with, but he is (for whatever reason) not considered a good credit risk, maybe the solution is for him to put up some sort of collateral and you can charge a legal rate of interest. (You'd be safe at up to 12%) Unless you are talking about a fairly small loan, you would want to work with an attorney to make sure your rights are protected in the transaction so that he can't use the collateral to secure another loan later. Anyway, just a thought.