Make cash contributions loans, not equity. The risks/reward of all the founders should be aligned, and aligned to working. The option of passive ownership is divisive.
Interest rate is pretty much irrelevant. If the startup fails, they're not going to repay. If the startup succeeds then the interest is dwarfed by the value of the lender's equity.
If the lender is worried about interest rates and credit worthiness, they probably should not be pursuing a startup. The idea of a loan is that it removes negotiations over a finite pie that probably is worth nothing over the long run.