Personal Loan to Business Amortization Schedule

If you as the business owner have loaned your business a lump sum amount, then you will need to treat it like an official loan to be amortized and create a predetermined schedule of repayments from the business to yourself.

This is fairly easy to do as this can be created and maintained in a spreadsheet software.


However, suppose that the repayments are NOT actually predetermined and instead the loan is amortized when only the business has the money to afford these repayments. Then how do justify the actual interest portion of each payment?

In this scenario, It is recommended that you create a Loan Amortization schedule in a spreadsheet software (like normal), but this time simply leave the payment amount column blank.

When the business does make a payment and you (as the business owner) type in this payment amount into your loan amortization spreadsheet, the spreadsheet should automatically calculate the breakdown (interest and principal) of this payment and also automatically calculate the new remaining balance of the loan.

Be careful however of a couple of things (over the life of the loan):


  • If the business goes a long period of time of not making any payments, then there may be accrued interest still building and thus this interest will need to add to the new remaining balance of the loan (most likely each month).
  • If the business decides, say, to make TWO loan payments in one month, you may want to ensure that you are not calculating loan interest for both of these payments; most likely (depending on any loan contract terms) any extra payments made would be applied directly to the principal of the loan and not deductible interest.


Overall, it is always a good idea to treat ALL loans to the business as official loans complete with contract terms and amortization schedules.


Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.

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