Michigan Compiled Laws, Chapter 41. Townships § 41.350n

(a) A note shall be payable in annual installments the aggregate of which does not exceed 10 and the first of which is due not later than August 1 after the calendar year in which the note is issued. Subsequent maturity dates, if any, shall likewise be August 1. The note shall bear interest at a rate not exceeding 4% per year, payable semiannually, and may be made subject to redemption on an interest payment date before maturity at par plus accrued interest on terms and conditions provided in the authorizing resolution.

(b) The amount of a loan authorized by section 20m shall not, when payable, exceed the following percentage of the total aggregate revenues derived from sales tax money received by the township for the preceding 5 calendar years:

(c) The resolution authorizing the borrowing shall contain an irrevocable appropriation providing for the payment of the principal and interest from the money to be derived from state collected sales tax returned to the township. After the borrowing is authorized, the township treasurer shall set aside in a separate fund from the money received in each year an amount sufficient for the payment of the principal and interest of the loan maturing on August 1 of the next calendar year. The full faith and credit of the township shall not be pledged.