Victor wrote:

I have a friend that is purchasing a plane and will start a business
of tow banner. He said I could fly the plane for him without been paid
, this way I can get many hours on my logbook.

Is it legal to do banner towing on a PP license without receiving
payment for it?

No. First of all you need a waiver by the FAA before you can tow anything
around, but your mother-in-law in the back seat.

Second, your "friend" is taking somebody's money in consideration of
flying a banner. This alone makes it a commercial operation, whether or
not the pilot is being paid in cash.

Third, even if your "friend" was not taking somebody's money for the
flight, as a PP, the pilot would need to share expenses evenly for the
flight AND have a commonality of purpose.

As an aside, I would note that banner towing is one of the more hazardous
jobs in flying airplanes. It does not have a stellar safety record, and
is not something I would do casually.