Entering a loan with deferred interest

Entering a Deferred Interest-Free Loan:

You can create the interest-free portion using automatic forecasting or set it up yourself using manual forecasting.

Automatic forecasting:

1

Under the Forecast tab of the Finance Forecasting module, click on the Funding tab.

You will see a setup window where you can describe how this portion of the loan is structured.

2

Enter the details of the interest-free portion in plain text. Include information such as the amount received, when you expect to receive it, the interest-free period, and the repayment terms.

Click on Draft my funding.

3

Upmetrics will draft the funding source based on the details you entered.

Review the suggested source and assumptions. If required, click on the Edit icon to make changes.

4

Once the details look correct, click on Add these sources.

The funding source will be added to your forecast, where you can review or update it whenever needed.

Manual forecasting:

1

If you prefer to create the interest-free portion manually, click on I'd rather set it up myself from the initial funding setup window.

2

In the Set up your funding groups window, enter a funding group name and a source name for the interest-free portion of the loan.

Click on Create these.

3

Upmetrics will create the funding source. Locate the newly created source under the Funding tab and open it to enter the assumptions.

4

Click on Fill it in to open the assumption form.

5

Enter a name for the loan and select the funding type as Other Financing (Borrowed).

TIP: Moving finance items from one group to another is hassle-free. For a detailed walkthrough, check out our help guide here.

6

Enter the loan amount and annual interest rate, if applicable. Then select the date on which you expect to receive the funds.

7

Indicate whether you'll repay this financing within 12 months and click on Save.

NOTE: A loan you'll repay within 12 months is considered short-term debt in your financial statements. A loan you'll repay in more than 12 months is considered long-term debt. Click here for more.

8

Amount Received: Enter the amount of money you'll receive and when you'll receive it. You can enter a single amount in one period or amounts across multiple periods, depending on how your loan is structured.

9

Amount Repaid: Enter the amount you plan to repay against the balance. Enter the interest-free payments in the periods in which you expect to make them.

NOTE: If you aren't sure of your payment amounts, you may want to consult your lender or use a loan payment calculator.

Adding Portion with Interest

The interest-bearing portion also supports both automatic forecasting and manual forecasting.

Automatic forecasting:

1

Under the Forecast tab of the Finance Forecasting module, open the Funding tab and start adding a funding source.

Describe the interest-bearing portion of the loan in plain text. Include the loan amount, term, interest rate, interest start date, and repayment terms.

2

Click on Draft my funding.

Upmetrics will use the information you entered to draft the funding source and its starting assumptions.

3

Review the suggested loan details. If required, click on the Edit icon to make changes.

4

Once the details look correct, click on Add these sources.

The interest-bearing portion of the loan will be added to the Funding section of your forecast.

Manual forecasting:

1

If you prefer to enter the interest-bearing portion manually, click on I'd rather set it up myself.

2

Enter a funding group name and a source name for the interest-bearing portion of the loan. Then click on Create these.

3

Locate the newly created funding source and open it to enter its assumptions.

Click on Fill it in to continue.

4

Enter a name for the loan and select the funding type as Loan.

5

Enter the loan amount, specify the loan term in months, and select the date you'll receive the funds.

Enter the interest rate as a percentage and select the date when the interest should begin.

6

Choose the repayment method for the loan, specify the amount you'll repay when required, and select the repayment start date.

Click on Save once the assumptions are configured correctly.

TIP: For detailed instructions on adding loans and configuring their repayment terms, click here.

This will appear in your Profit & Loss, Balance Sheet, and Cash Flow statements as shown below:

In your P&L report, the loan's interest will be listed as an interest expense.

On the Balance Sheet, the outstanding loan will be recorded under the applicable debt or liability section.

In the Cash Flow statement, the funds received will appear in the Loan Received section.