Steps
- Go to Treasury → Loans → Lenders & borrowers and add each one: a related company (pick the group company if you have a holding), a bank, a director, a shareholder, an individual or another institution.
- Go to Loan policies. Starting policies are there for you - *Bank term loan*, *Director’s loan to the company*, *Intercompany loan - borrowed / lent*, *Loan to a director*. Edit them or add your own.
- A policy sets: we borrow or we lend; who it is for; the interest (none, flat, reducing balance with equal instalments, or interest only); the rate a year; the term in months; repayments monthly, quarterly, every 6 months, yearly or once at the end; grace months (interest only at first); the largest loan; and above what amount a second person approves.
- And the accounts: the loan (borrowed: 2500 Long-term borrowings, 2510 Loans from related companies, 2520 Loans from directors; lent: 1170 / 1171 Loans receivable), interest (7100 Interest expense or 7000 Interest income) and interest accrued (2420 Accrued interest payable or 1175 Interest receivable). Missing accounts are created for you.
Good to know
- A loan takes its policy’s terms when it is raised; changing a policy later never changes running loans.