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Bounce Back loan - Government paid interest

Hi
How do I record in my loan account on QF for the first 12 months of government paid interest on my Bounce Back Loan please?

Thanks
James

You don’t

You didn’t pay it, the government did, therefore there was no cost to your business.

So do I deduct the interest amount from the loan balance then? Starling Bank have added the full interest cost to the loan balance so the figure doesn’t match with my QF balance.

I don’t know how you originally tagged the loan you received but what I would have done is tag it as a transfer from a new bank account called BBLS then just tag the repayments as a transfer to it.

Then in the new BBLS loan account create a money out transaction just for the interest amount and tag it to loan interest.

You’ll need to work out how much of your monthly repayment is capital and how much is interest.

What you should end up with is the interest paid as an expense on the P and L and the loan account balance being the loan amount left to repay

Hi
I’ve got it as a “Loan account” on QF, with the funds then transferred to my business account, and then a Debit transaction on the loan account with the interest amount.
Starling Bank don’t separate the capital and interest in their payments (I can see how much has been paid in total as interest and capital on their online banking), So I take it I’ll have to work it out manually.

When The payment is made and it’s transferred from bank account to loan account on QF does it just get tagged as a transfer for whole amount or has it got to be somehow separated?

It has to be seperated. The loan account will be in debit by the loan amount, if you don’t seperate it, it will end up being in credit by the total interest.

What you should have is a transfer in for the repayment, you then need to create a money out transaction for just the interest amount and tag it as loan interest.

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