Director loan

[ddbbss19]

Hello,

I have my visa extension due this week and really appreciate if someone could help me regarding this. I invested 19k in to business in 2013-2014 as director's loan. However, my accountants made a mistake and he showed this amount under creditors amount falling WITHIN a year in both accounts 2013-2014 & 2014-2015. Is that ok for me to have loan agreement mentioning "The tenure of Loan Agreement will be for 12 months and renewable with the consensus of both the parties depending upon the profitability index of an enterprise." OR should I write up new loan agreement letter increasing the term of the loan to 3 yeas and put them under creditors amount falling AFTER one year in account 2015-2016 ( management account ) .

is there any minimum term required for the term of the loan? as I found most of the loan agreements are either for 3 or 5 years but couldn't find anything abt the minimum term in both application form and policy guidance.

Really appreciate your quick response considering the time left to make a visa application.

[zimba]

There is no specific loan period required by the rules. You can do it for 3 years if you wish

[ddbbss19]

thank you for your reply Zimba..how can I show the loan agreement for 3 years when the accounts has shown creditors falling within ONE year for the financial accounts he submitted to companies house for the year 2013-2014 & 2014-2015??

[zimba]

That is accounting jargon on the balance sheet. That means the company owed money to creditor(s) by the end of the tax year for xxx amount. That appears on your balance sheet every year as long as your company in debt to creditors.

[ddbbss19]

yes you are absolutly right but if I show the loan period lets see for 3 years than it should reflect on balance sheet as creditors amount falling AFTER ONE year , not WITHIN one year... what Im thinking to do it to set up loan agreeement for 12 months started in 2013, thn make a letter that the loan term has now been extended for 3 years....so for the year 1 & 2 it was old agreement and for the 3rd year management accnt it will be shown in AFTER ONE YEAR.. by going thr this route, M not sure how HO will look this??

[zimba]

I am not sure how this is even relevant as the rules do not require a specific loan period. HO wants to see the investment is done and your loan agreement has the terms required.