Purchased equpment with personal loan to start business

Hey there, @quinn1.

During my time as a Support Agent, I always found this line from our guide on Paying for Business Expenses with Personal Funds to be a little antithetical: "Although we recommend not to mix business and personal funds, we know it happens sometimes."

To me, the last part stands true - it is in the very nature of a small business to blur the lines between their personal and business money flow when the need arises. Since your situation is a little more complex than what the guide entails, that method may not apply.

I've found a similar question from the past where @Regina_Lend_A_Hand_Accounting shared some insight on this topic. Regina, does their approach sound like the proper way of recording the matter?

Cheers to a safe and successful week ahead, everyone.

Hello @quinn1 and thank you @MichaelDL 

It sounds like you have made an "Equity Contribution" to the Company as a single member LLC. This is money that as a member you have contributed to the LLC that the company does not have to pay back because it increased your ownership interest in the company considering the original equipment loan was for a fixed asset of the company. If you were going to pay back the loan, it would be a loan from a shareholder to the company, and therefore a liability of the company. There is no limit to the amount of money a member can loan or contribute to its own company. The equipment is a fixed asset of the business and needs to be recorded as such on your Balance Sheet.

I paid for the machine in full, since I took out a personal loan. I am paying the monthly payments by transferring the monthly amount back to my personal checking when the payment comes out. 

If I understand what your saying correctly, I am correct in entering the machine as a fixed asset for the purchased amount. I am still hung up on how to classify the monthly payment transfers for the personal loan... classify these as a equity investment or owners draw?

@Regina_Lend_A_Hand_Accounting 

Thank you so much for your info.

Now I'm looking to enter the equipment in as equity investment to the company. How do I record this into quickbooks desktop?

Thank you for your time!