Small Business Accounting

What are Directors Loans?

By

Chris Andreou

What are Directors Loans? guide

Contents

A director's loan is defined as money taken from your company that isn't either of the following:

  • A salary, dividend or expense treatment
  • Money that you've previously paid into or loaned the company

A Director's Loan Account (DLA) is a record of all transactions between the company and its directors. It records not just the money owed by the directors, but also the money owed to them.

Director's loans can be used:

  • when you need to access money in your company-apart from what you take out as a salary, dividend or expense treatment-for personal reasons.
  • for a variety of purposes, such as covering the costs of a home repair bill, travel plans or any unforeseen personal expenses that may arise.

<p>A <a href="https://www.goforma.com/small-business-accounting/what-is-directors-loan-account" target="_blank"><strong>director's loan</strong></a> is defined as money taken from your company that isn't either of the following:</p><ul><li>A salary, dividend or expense treatment</li><li>Money that you've previously paid into or loaned the company<br></li></ul><p>A <strong>Director's Loan Account</strong> (DLA) is a record of all transactions between the company and its directors. It records not just the money owed by the directors, but also the money owed to them.<br></p><p><strong>Director's loans can be used</strong>:</p><ul><li>when you need to access money in your company-apart from what you take out as a salary, dividend or expense treatment-for personal reasons.</li><li>for a variety of purposes, such as covering the costs of a home repair bill, travel plans or any unforeseen personal expenses that may arise. </li></ul>

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