--- title: Loans to your startup description: How to manage loans you make to your startup --- [Skip to content](https://support.standardledger.co/knowledge/loans-to-your-startup#main-content) ![](https://support.standardledger.co/hs-fs/hubfs/Standard%20Ledger%20Logo_RGB_transparent.png?height=40&name=Standard%20Ledger%20Logo_RGB_transparent.png) Open main navigation Close main navigation - [Contact us](mailto:support@standardledger.co) [Contact us](mailto:support@standardledger.co) Hi, how can we help you? - There are no suggestions because the search field is empty. 1. [Knowledge Base](https://support.standardledger.co/knowledge?hsLang=en) 2. [ACCOUNTING](https://support.standardledger.co/knowledge/accounting?hsLang=en) 3. [Accounting / Bookkeeping Articles](https://support.standardledger.co/knowledge/accounting?hsLang=en#accounting-bookkeeping-articles) # Loans to your startup ## How to manage loans you make to your startup When startups are first starting out, founders often tip in some initial funds to kick things off. These initial funds should be recorded as Loan from Founder so they can be tracked and later paid back (see [paying yourself](https://support.standardledger.co/knowledge/how-to-pay-yourself-from-your-startup-company?hsLang=en)). We recommend that you setup an account as a Non-current Liability account, similar to the below, including adding to your Dashboard watchlist as a reminder of the outstanding loan balance. Note that in this example the loan has been set up as Loan from(to) Founder - amounts lent from the Founder will be shown as a +ve number. In the event that there are (occasionally) amounts lent TO the Founder these would then be shown as a -ve number in the Loan account. We recommend that there be no net loans to Founder at the end of the financial year, as these can be subject to [Australian ATO](https://www.ato.gov.au/Business/Private-company-benefits---Division-7A-dividends/In-detail/Division-7A---Loans/) and UK HMRC regulations / scrutiny. ![](https://support.standardledger.co/hubfs/Knowledge%20Base%20Import/downloads.intercomcdn.comio43750088ed816d6318362efbdeed31caSetuploanaccount.jpg) Once the Loan account is setup it can then be used to record receipts of funds into the business (ie a Loan From Founder) or paying back the loan. Note that loan accounts can also be use to record amounts owing to Founders for any [expenses they may have incurred on the company's behalf](https://support.standardledger.co/knowledge/expenses-incurred-personally-on-behalf-of-your-startup?hsLang=en)using their own personal external funds/cards etc. For clarity, there should be a [loan agreement](https://legalvision.com.au/documents/loan-agreement/) in place that covers interest rates, repayment terms/priorities. Note that the position of loans from Founders can complicate future funding rounds. Investors prefer to see their money growing the business, not going immediately out the door to pay down past debts. Especially if these debts are to insiders, they'll usually expect them to convert the debt into equity rather than be repaid. (eg treating the loan like a convertible note). ![](https://support.standardledger.co/hubfs/Knowledge%20Base%20Import/downloads.intercomcdn.comio4375009469f01683b56b811e4640f736Useloanaccount.jpg) ![](https://support.standardledger.co/hubfs/Knowledge%20Base%20Import/downloads.intercomcdn.comio4375010997cfa2b8d15a08030f2e08a5LoansToYourStartup.jpg) **Other resources** - [The Australian Division 7A clause of the Income Tax Act](https://www.ato.gov.au/business/private-company-benefits---division-7a-dividends/in-detail/overview/division-7a---answers-to-faqs/) outlines treatment of any amounts paid to related parties, especially business owners \[ATO website\] - [STARTUP FOUNDER INFORMATION](https://support.standardledger.co/knowledge/startup-founder-information?hsLang=en#main-content) - [Startup Funding](https://support.standardledger.co/knowledge/startup-founder-information?hsLang=en#startup-funding) - [CONTACTING STANDARD LEDGER](https://support.standardledger.co/knowledge/contacting-standard-ledger?hsLang=en) - [OUR BOOKKEEPING SERVICES](https://support.standardledger.co/knowledge/our-bookkeeping-services?hsLang=en#main-content) - [Bookkeeping Services](https://support.standardledger.co/knowledge/our-bookkeeping-services?hsLang=en#bookkeeping-services) - [Dext for Supplier invoices and Employee Expenses](https://support.standardledger.co/knowledge/our-bookkeeping-services?hsLang=en#dext-for-supplier-invoices-and-employee-expenses) - [OUR PAYROLL SERVICES](https://support.standardledger.co/knowledge/our-payroll-services?hsLang=en#main-content) - [Employers](https://support.standardledger.co/knowledge/our-payroll-services?hsLang=en#employers) - [Employees](https://support.standardledger.co/knowledge/our-payroll-services?hsLang=en#employees) - [OUR TAX SERVICES](https://support.standardledger.co/knowledge/our-tax-services?hsLang=en#main-content) - [Activity Statements](https://support.standardledger.co/knowledge/our-tax-services?hsLang=en#activity-statements) - [Tax Returns](https://support.standardledger.co/knowledge/our-tax-services?hsLang=en#tax-returns) - [OUR CFO SERVICES](https://support.standardledger.co/knowledge/our-cfo-services?hsLang=en) - [OUR FINANCIAL MODELING SERVICES](https://support.standardledger.co/knowledge/our-financial-modeling-services?hsLang=en#main-content) - [Financial model usage guidelines](https://support.standardledger.co/knowledge/our-financial-modeling-services?hsLang=en#financial-model-usage-guidelines) - [OUR R&D TAX INCENTIVE SERVICES (Australia)](https://support.standardledger.co/knowledge/our-rd-tax-incentive-services-australia?hsLang=en) - [OUR GRANT SERVICES](https://support.standardledger.co/knowledge/our-grant-services?hsLang=en#main-content) - [Top Grants](https://support.standardledger.co/knowledge/our-grant-services?hsLang=en#top-grants) - [OUR VALUATION SERVICES](https://support.standardledger.co/knowledge/our-valuation-services?hsLang=en#main-content) - [How we prepare your valuations](https://support.standardledger.co/knowledge/our-valuation-services?hsLang=en#how-we-prepare-your-valuations) - [OUR ACCOUNTS PAYABLE SERVICES](https://support.standardledger.co/knowledge/our-accounts-payable-services?hsLang=en) - [ACCOUNTING](https://support.standardledger.co/knowledge/accounting?hsLang=en#main-content) - [Xero](https://support.standardledger.co/knowledge/accounting?hsLang=en#xero) - [Accounting / Bookkeeping Articles](https://support.standardledger.co/knowledge/accounting?hsLang=en#accounting-bookkeeping-articles) - [PAYROLL](https://support.standardledger.co/knowledge/payroll?hsLang=en#main-content) - [Payroll articles](https://support.standardledger.co/knowledge/payroll?hsLang=en#payroll-articles) - [TAX and COMPLIANCE](https://support.standardledger.co/knowledge/tax-and-compliance?hsLang=en#main-content) - [Structure](https://support.standardledger.co/knowledge/tax-and-compliance?hsLang=en#structure) - [Key dates and How PAYG and GST work](https://support.standardledger.co/knowledge/tax-and-compliance?hsLang=en#key-dates-and-how-payg-and-gst-work) - [ATO information](https://support.standardledger.co/knowledge/tax-and-compliance?hsLang=en#ato-information) - [Income and deductions](https://support.standardledger.co/knowledge/tax-and-compliance?hsLang=en#income-and-deductions) - [UK ARTICLES](https://support.standardledger.co/knowledge/uk-articles?hsLang=en#main-content) - [Company setup and operations](https://support.standardledger.co/knowledge/uk-articles?hsLang=en#company-setup-and-operations) - [Payroll](https://support.standardledger.co/knowledge/uk-articles?hsLang=en#payroll) - [VAT](https://support.standardledger.co/knowledge/uk-articles?hsLang=en#vat) - [Raising Capital](https://support.standardledger.co/knowledge/uk-articles?hsLang=en#raising-capital) Need support? email support@standardledger.co © 2026 Standard Ledger