What is the loan interest rate?

Our plan document calls for interest to be charged at prime + 1%.

You must charge interest on the loan at a reasonable rate. The interest rate should be consistent with interest rates charged by banks or lenders for a loan made under similar situations. If it meets these criteria, it is considered reasonable. 

Based on recent IRS guidance, the following rates may be considered reasonable: 

•  A CD rate + 2 percent
•  The prime rate + 1 percent