Why borrower matters to a first-time founder
The borrower is the party that receives the money and owes it back. That name goes on the repayment promise, and it is the name the lender pursues if payments stop. A founder who signs only for the company is not in the same position as a founder who borrows personally. Interest is usual. The duty to repay is what makes someone the borrower, including on an interest-free loan.
Examples of borrower
A logistics company in Accra borrows GHS 600,000 to buy two vans. The money arrives in the company account, and the company owes it back with interest, so the company is the borrower. The founder signs as a director and gives no personal guarantee. If the bank also wants a guarantee, the company is still the borrower. The founder then takes on a separate promise as guarantor.
Common misunderstanding
The borrower is not the lender, and not the guarantor. A guarantor promises to pay if the borrower does not. The borrower is also not every founder of the business that borrowed. Someone who only introduces the parties, and takes on no duty to repay, is not the borrower. An interest-free loan from a relative still has a borrower if repayment is owed.
When to use it
Use the word for the party that receives the funds and must repay them. Before you sign, see whether that party is you or your company, and whether a guarantee adds someone else. If you are only making an introduction and taking on no obligation, do not describe yourself as the borrower.