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On a longer term loan from a company to a director or other party, I believe there's a regulated minimum rate that it needs to be provided at, for a simple unsecured loan, is it something like BBSW + 5% say 7% in total?

Thanks for the response. What's the definition of a back to back loan? To mitigate this issue I guess you would just need to ensure the minimum time period is met between repayment of one loan and issue of another loan.

Given that, there would seem nothing to stop a director regularly accessing short term loans from the company repaid back before the end of the financial year, then issued again in July in the next financial year. This would be a very effective way for the director to access capital as needed.

Thanks for your feedback. So you think the company can only loan to a person once, if they repay the loan the cnmpany couldn't loan to them again? Even if it was at commercial interest rates?

I'm sure there's a lot of different things to do, I just want to understand what rules are obligatory. Eg a short term loan from the company to a director that wouldn't incur interest rate would be a very effective means for the director to access capital.

I'm referring to a company loaning to a director, not a director loaning to a company. The director loan is an alternative to a dividend distribution. The query then relates to what are the terms and rules around such related party loans. Can a short term loan that is repaid in a short...

Hi All, If one has a pty ltd company for which they are sole director and sole shareholder, I understand you can provide a director loan but there is a government set interest rate based on commercial terms. I think its something like BBSW + 5% so something like 7% at the moment? If one...