What is true regarding a partner granting a loan to their own partnership?

The correct understanding revolves around the nature of loans made by partners to their own partnership and how these transactions are treated within partnership law. When a partner grants a loan to their partnership, this loan is indeed recognized and enforceable. However, the rights that a partner holds in this situation differ from those of external creditors.

In this context, while a partner can make a loan to the partnership, they do not enjoy preferential rights over the partnership's assets that are available to third-party creditors. This means that if the partnership faces financial difficulties or insolvency, all creditors, including partners who have loaned money to the partnership, are treated equally in terms of their claims against the partnership’s assets. All creditors, including the partner-creditor, must wait for distribution based on the available assets and the nature of the debts owed.

Therefore, the assertion that a partner can grant a loan but has no preferential rights is accurate, making this the correct statement. While the loan is a legitimate financial transaction, it does not elevate the partner to a superior position over outside creditors simply due to their status as a partner in the firm.