Collection Consultancy Australia

DIV 7A Loan Agreements - FAQ's

A Div 7A Loan Agreement is a Loan Agreement between a business owner, director or shareholders and their trading entity.
A Div 7A Loan Agreement allows a business owner, director or shareholder to loan money from their business at a set rate over a defined period.
Given the nature of Div 7A Loan Agreements, they have become a focus of attention for the Australian Taxation Office. Formalising your Div 7A Loan Agreement cements the arrangement and complies with ATO requirements.
Part of our Div 7A Loan Agreement Package is our Loan Management Dashboard which gives you complete access to your loan agreement on an ongoing basis.
There are several reports available through the Loan Management Dashboard. The most popular is the end of year payments report which outlines all payments made for the period including a principal and interest breakdown. This is especially handy for your accountant and can save hours upon hours of work come tax time.
There is no set rate associated with our Secured Loan Agreements, but it should be noted that part of the Australian Taxation Office requirements is that the interest rate needs to be equivalent to the standard commercial rate.
The loan period can be negotiated between the lender and the borrower but is generally set for a defined period less than 7 years. It should be noted that any business loan agreement should be done in consultation with your accountant.
Yes, your loan period can be extended through your Loan Management Dashboard, however any loan period extension should be done in conjunction with advice from your accountant.
Yes, the loan repayment amount varies depending on the interest rate, loan period and duration of the loan.
Yes, when setting up the loan the borrowers bank details can be included, and an automatic direct debit set up.

Any Questions?

You are welcome to email us any questions – or call to speak to a consultant.