Not at all unusual for start up's. The cost of borrowing money is one of the major pitfall's for small Pink Sheet companies.
The alternative is usually PIPE financing which is always negative since the lenders stack the deck against not only the company but the shareholders as well.
Getting more favorable terms by borrowing from family keeps the shares in friendly hands.
Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.