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Recording asset loan repayments

When a debtor makes a repayment on an asset loan your fund has advanced, you should enter this as a bank transfer.

You can do this using the BANK TRANSFER function under the BANK tab, or by allocating a bank transaction either directly from the Bank Data Import or from Suspense Allocations. Use the following steps to record using the BANK TRANSFER feature.

Note: Mclowd acknowledges that asset loans likely bear no relationship to bank accounts.  This process is performed using the Bank functions because the steps to record repayments are logically identical to the steps used to record bank interest and bank transfers.  In fact, prior to the implementation of this feature, users who extended asset loans set them up and operated them as if they were bank accounts.

The repayment received will add to your bank account and reduce the balance of the loan.

Note: While the repayment may be of both principal and interest, it should be recorded as a simple bank transfer reducing the loan balance by the full amount of the repayment. There is no need to dissect the repayment to determine the interest component because interest is calculated periodically and added to the account through the Add Interest Income process.

On the BANK Tab, click BANK TRANSFER.

  • Enter or select the Date the repayment was received
  • In the From Account field, select the Asset Loan Account the repayment is reducing

  • In the To Account field, select the Bank account to which the repayment was (or will be) deposited

  • Enter the amount of the repayment

  • Type notes to detail the nature of the repayment