@Tracy948 

In the OP's case, yes, creating a vendor credit will reduce the note receivable balance by the amount entered on the vendor credit which is what you want if you're applying the note receivable balance to a vendor bill.   I'm not sure I understand your situation.  You mentioned you have "vendor repayment checks" and "the company gave another individual a loan so there’s no bills to apply it to."  If you're receiving checks, you can apply them to the loan when you record the deposit.