How to Categorize SBA Loan? And Loans/interest in General?

Not sure if it should be considered a transfer? it’s not income right? since it’s not taxable…

another scenario: what if your business loans money to another business? the principle being lent out should be categorized as…? And, the interest earned will be considered income, but what about the original principle being repaid, what should that be? thanks!

Correct, that loan is not income. You can code it as a transfer. If you can link that loan to Tiller, then great. My guess would be that you can. If not, create a liability on Balance History to get the liability on your balance sheet (Balances). You can call the liability a loan payable.

When you loan money to another, you have an asset called loan receivable. You can code the money going out to the borrower as a transfer. Create an asset called loan receivable to get the asset on your balance sheet (Balances).

When you receive a payment, split the transaction into two pieces, interest income (code as income) and loan repayment (code as transfer). If the payment includes principal, then make a manual entry on Balance History to reflect the new reduced loan receivable balance.

To keep all the numbers straight and to be sure everyone is on the same page, an amortization schedule is recommended. See this link for a template to create this schedule yourself. Loan Amortization Schedule and Calculator

Also, I would recommend a written loan agreement if for no other reason than to have support for the existence of the loan for tax purposes in case you ever encountered the unfortunate situation where you had to write off the loan as worthless and uncollectible.



1 Like

Thanks! Does Tiller have a balance sheet add on? i just finished navigating tiller for personal budgeting and now venturing off to figure out the business side and haven’t been able to explore what the add ons (er, apps?) have to offer. On a related note, if I have share holder’s withdrawals, would i code it as transfer as well? Would it make sense to create a group just called S/H W/D and loans? or something like that to track it going in and out? what about reimbursements in tiller? say i buy something and the business pays me back. can i just do a bank transfer for the exact amount to my personal account and code that transfer as the correct expense (ie office expense). thank you so much, i really appreciate all your help!!!

  1. The balance sheet in Tiller is the Balances tab.
  2. Sounds like you have an S corp. Right? Single owner? Treated as a SMLLC for tax? I am guessing right now you have both personal and business in one Tiller sheet, right? Tiller allows five sheets. You might want to consider putting personal in one sheet and business in the other sheet. This makes things easier for some people.
  3. S/H W/D’s are transfers.
  4. You might consider tracking W/D’s, loans, and reimbursements separately. This should make things easier.
  5. Regarding reimbursements, you will have two transfers on the personal side and one expense on the business side. On the personal side, code the purchase and reimbursement in from the business as transfers. On the business side, code the reimbursement out as an expense.

Cheers, Blake

1 Like

we have an s corp. personal and business are on separate sheets.