How to set up a loan to an external company.

Hi there, @ddisimone.

Let me share information on how you can set up a loan in QuickBooks Online (QBO).

To get started, you'll need to set up a liability account to record the loan. Here's how:

1. Click the Gear icon at the top.
2. Select Chart of Accounts. 
3. Click the New button at the upper right hand.
4. In the Account Type drop-down, select Long Term Liabilities. However, if you're going to pay the loan off by the end of the year, click on Other Current Liabilities.
5. Choose Notes Payable from the Detail Type drop-down. 
6. Enter a name for the account.
7. Type in the amount of the loan as a negative amount in the Amount field.
8. Hit Save and Close.

Once you're ready to record the payment, follow step 3 on this article: Set up a loan in QuickBooks Online.

In case you want to run reports to know where your company stands in terms of income and expenses, visit this resource: Common custom reports in QuickBooks Online.

If you have any other questions, don't hesitate to reach back out. I’m here to answer them for you. Take care.

Thank you for the quick reply. The directions are clear for setting up a loan that one would be taking out in the name of the company but my situation is the opposite. We loaned out money several years ago and there is a balance as of 01 Jan 2020, the beginning of our fiscal year. I am trying to understand how to set up that loan to show we have loaned the money and are receiving payments against it. Can you advise on this situation?

I have the same issue. Were you able to get an answer to your issue? If you can please share so I can set mine the same way. 

Good day, nwagnitz. 

I'd be glad to show you how to set up a loan in QuickBooks Online (QBO).

In QuickBooks Online, you can set up a liability account to record the loan and its payments. This account tracks what you owe.

Here's how:

1. Go to Settings ⚙  at the top.
2. Select Chart of Accounts.
3. Click the New button at the upper right-hand.
4. From the Account Type ▼ dropdown, select Long-Term Liabilities. Note: If you plan to pay off the loan by the end of the current financial year, select Current liabilities instead.
5. From the Detail Type ▼ dropdown, select Notes Payable (or Loan Payable).
6. Enter a name for the account, like "Loan for a car" or "Covid-19 relief loan."
7. Type in the amount of the loan as a negative amount in the Amount field.
8. Once done, click select Save and close.

For more information about managing loan payments, check this article (Proceed to Step 3): Make a loan payment in QuickBooks Online.

In case you need help reconciling your account, refer to this link: Reconcile an account in QuickBooks Online.

Let us know if you have other concerns or additional questions besides setting up a loan in QBO. The Community is always here to help you out. Take care, and have a good day

I was going through this same issue and obviously the solution provided wasn't accurate to meet the need as it solved the reverse loan type.  However, in the chart of accounts I was able to find some better resources...

Add a new account in the chart of accounts under: "Other Current Assets" this will then allow you to choose the account type "Loans to Others."  Set this account up according to your loan terms and needs and it should work. 

Hi,

i have done this, but im not sure how i record the monies we have lent too a customer

can you help? 

Hello there, @lucy ddg.

I appreciate you for joining the thread. Let me help you record a customer loan in QuickBooks Online.

The different ways we can record them depend on the purpose of the loan. The first option is to use loans to close open invoices, in which we can create an account first to track the loan and the repayment. I'll guide you on how:

1. From the Settings menu, select Chart of accounts.
2. Click New, then choose Assets.
3. From the Save account under and Tax form section dropdown, select Loans to Others.
4. On the Account name field, enter a recognizable name like "Loan - customer name."
5. Select Save without entering an opening balance.

Then, create a Journal Entry that creates the opening balance of the loan and adds credit to the accounts receivable for the customer. We can apply the credit to the open invoices. Here's how: 

1. Go to + New, then choose Journal entry.
2. From the first line, go to the Account dropdown and select the account you created to track the loan.
3. On the Debits field, enter the loan amount.
4. On the second line, from the Account dropdown, select your accounts receivable.
5. From the Name dropdown, choose the customer you give a loan to.
6. Click Save.

We also have a second option to issue a multi-purpose loan to your customer. You can follow Option 2: Issue a multi-purpose loan to your customer from this article for the step-by-step process: Track customer loans in QuickBooks Online. It also includes steps for creating a recurring invoice for your customer's monthly payments.

In addition, I recommend reaching out to your accountant for additional guidance regarding this matter. This way, we can ensure the accuracy of your books. If you're not affiliated with one, you can utilize our Find an Accountant tool to look for one in your area.

Please let me know how this goes, and leave a reply below if you have additional questions about recording loans in QBO. I'll be around to help. Keep safe always. 

I have a similar issue. My company buys apartment complexes that are run down an need rehabbing. We get the loan and money from our investors. With each property we are given so much contruction money to rebuild them. As the properties are completed and units rented until the properties are at full capacity and running on their own we sometimes loan the properties money to get going. We just invoice it to the property no interest or monthly payments. We get our money back when we refinance the property or sell it. So how would I catagorize this loan to the property in my coa and on my financial statements?. 

I can help record the loan in QuickBooks Online (QBO), MimiSheila6.

We can create and set up a liability account to keep track of the loan. Let me walk you through the process.

1. Go to the Accounting menu, and select Chart of accounts.
2. Select the New button.
3. Choose Liabilities.
4. From the Save account under drop-down arrow, click Long Term Liabilities.
5. In the Tax form section, pick Other Long Term Liabilities.
6. Enter the account name.
7. Hit Save.
   

You can also visit this page about recording a loan repayment in QuickBooks. It's when you're ready to pay back the loan.

Please let me know if there’s anything I can help with you. I’m here determined to answer them for you. Have a great day.

This works great for mee too. 
the “loan to others”

How then do you record when then make you a payment???  

I've got your back on recording loan payments in QuickBooks Online (QBO), Daniel. 

If you're the one who's making a payment, you can write a check to record your loan payments. Here's how:

1. Sign in to your QBO account.
2. Click the + New button, then select Check.
3. In the Vendor drop-down, select the seller who's carrying your loan. Then, choose the bank account.
4. Go to the Category details section and select a liability account for your loan. If you haven't created a liability account yet, check out this link to create one.
5. Enter the necessary information.
6. Click Save and close.

On the other hand, you can use a bank deposit if you are the one who's receiving payment.  Most importantly, I still recommend seeking help from your accountant on recording your loan payment. They can provide other options to take based on your recording practice and business needs.

As always, you can visit our QuickBooks Community help website if you need tips and related articles in the future.

Should you need further assistance recording loan payments. I'm available here to help any time,

This all makes since - one step further - how do you run statements for these types of customers.  I am set up this way for the loans but I am not seeing this activity show in the Customer Transactions - I would like to send the customer a Statement monthly showing the loan activity and balances.  

Hello there, @crmalone33. 

Let me help you send a customer monthly statement in QuickBooks Online (QBO).

To start, can you tell me what set up did you follow? Please note that the thread above aside from Carneil was set up for the loan account from the vendor side. If you want to set up a loan for your customer, you'll have to create a Chart of Accounts and select Other Current Assets as account type and Loans to Others as the detail Type.

Here's how:

1. Go to the Gear icon or Settings and select Chart of Accounts.
2. Select New and then select Other Current Assets.
3. From the Detail type dropdown select Loans to Others.
4. Enter an account name, number and opening balance.
5. Review it and click Save.

After that, create a transactions for your customer that you want to send the customer statement and select the newly created account as the category. Once done creating a transactions, it'll show the activity for the category as loan in the customer transaction statements. You can follow the steps below to check:

1. Go to the Sales menu and select the specific customer in the Customers section.
2. In the Statements section, you can check below if it the transactions under the category of Loan shows.
3. To verify, click the transaction.

For reference, you can check this article: Track customer loans.

On the other hand, to send the customer statement follow the steps below:

1. Go to the +New icon and select Statement.
2. Select the Transaction Statement as the Statement Type.
3. Check the box list of recipients you want to send the statements.
4. Scroll down and click the Print or Preview section to verify.
5. Once done, you can Save and Send.

To know more about customer statements and how to customize it, you can check this article: Create and send customer statements.

I'll also share these resources that can help you get an overview of how your business is running through this feature in QBO:

• Run reports.
• Customize reports.

If you have any concerns about managing customer statements, please tag me in the comment section, @crmalone33. I'll assist you in any way possible.