Due to major works (mainly additions) at Dandenong (not at BS's caf) during 2016-17, BS's caf suffered an economic downturn for the year (like other shops in the centre). In response to the economic downturn, on 12 July 2017, Baker's brother (Brown) lent BS $130,000 to help BS "get back on track". The loan was an interest-only loan at 7% with interest paid monthly. The 7% interest rate was slightly above a market rate of interest, mainly because BS needed the funds quickly and Brown insisted on that rate. Interest paid to Brown for the 2018-19 year was $12,500. BS used the borrowed money to meet ongoing expenses (including its rent to Dandenong).

Advise BS on the income tax implications of the above. Fully explain your advice by reference to tax legislation, tax cases and tax principles. (Australian Taxation Law implications)