In January 2018, Elon Musk needed $100 million. Instead of calling a bank, he turned to SpaceX, the rocket company he founded and where he serves as chief executive.
Over the next three years, Mr. Musk borrowed a total of $500 million from his company. The loan terms were significantly lower than what most banks offered, with an interest rate that fluctuated from less than 1 percent to nearly 3 percent, according to internal SpaceX documents obtained by The New York Times. The documents did not say how Mr. Musk planned to use the money, which he paid back to SpaceX by the end of 2021.
The loans and their exceptionally kind terms, which are not permitted at public companies, were possible only because SpaceX is privately held. They were just one way Mr. Musk has used SpaceX as a kind of piggy bank over the last two decades, according to an examination by The Times based on corporate filings, lawsuits, internal documents and interviews with people close to the firm.
Mr. Musk not only secured loans from SpaceX to himself, but also relied on the firm to shore up at least three troubled businesses in his orbit, The Times found. Those included SpaceX’s lending money to his electric carmaker Tesla when it needed cash; injecting funds into SolarCity, a struggling solar energy company he owned a large stake in; and buying his cash-burning artificial intelligence venture, xAI.
The moves benefited Mr. Musk personally and his other businesses to an unusual degree, even in the opaque world of private companies. Some SpaceX investors — including Founders Fund, the venture capital firm co-founded by Peter Thiel — have at times been concerned that Mr. Musk prioritized his interests to the detriment of other shareholders, said two people with knowledge of their thinking, who were not authorized to speak about confidential discussions.
“These are conflicted transactions,” said Ann Lipton, a law professor at the University of Colorado Boulder. She added that such conflicts were a “hazard” of investing in someone who runs multiple companies.