new sole trader business showing startup loan

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Hi I am trying to setup my initial accounts and am struggling with a number of linked problems basically before opening the business I spent 20K on setting up the premises and equipment I have receipts for all of this and want to show these costs in  free agent I also want to show that the initial 20K as either capital introduced or a directors loan so I can repay it from the businesses over the next few years.

Does anyone have any ideas on the best way to do this please
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Adrian Bate

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Posted 1 month ago

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Niamh Burns, Employee

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Hi Adrian,

Thanks for your question and hopefully I can help.

We would normally recommend that costs incurred in the start up of a business are entered as out of pocket expenses. These expenses will have to be dated on the FreeAgent start date (which should be the same as your Company start date as it's a new business), regardless of when you incurred the cost.

The My Money -> Expenses section will keep track of how much you are owed and when you are being reimbursed this will be explained through your bank as Money Paid to User, Category: Expense Payment. 

However, you say that you would like the expenses to be recorded in the Director's Loan account, rather than re-payed as Out of Pocket expenses.

To do this you will need to enter the out of pocket expense as normal, and then to move this over to the Director's Loan account you need to enter 2 manual bank transactions dated the same day as the expense:

Money Out > Money Paid to User > Select user > Expense payment

Money In > Money Received from User > Select user > Payment to Director Loan account

This will show an expense repayment and transfer the amount into the director's loan account.

You might find these articles from our Knowledge Base helpful:

The FreeAgent start date - new businesses

Expenses dated before the FreeAgent start date

I hope this helps Adrian, but if you require anything further, or more specific advice, please send us an email to