Set up a new bank account by navigating to the 'Banking' tab at the top of the screen and selecting 'Bank Accounts' from the drop down menu.
From the 'Bank Accounts Summary' page, select 'New' and choose 'Bank Account'.
Call it "Bank loan", or something similar. Don't tick either the 'This is a Personal Account' or 'Make this my Primary Account' boxes.
The opening balance will normally be £nil unless the loan came in before your FreeAgent start date.
When the money from the loan hits your main bank account, explain that transaction in your main bank account with type Transfer from Another Account, and choose the bank loan account from the list of accounts.
When you pay money back from the main bank account to the loan, explain those transactions in your main bank account with type Transfer to Another Account, and choose the bank loan account from the list of accounts.
Explain them with type Payment and category Interest Payable.
How to deal with a loan from an individual
You have two choices here.
You can use the method above and set up a bank account, or, particularly if the loan is from a director or family member of a director, set that individual up as a user of your FreeAgent account (You can always dial down their access level to No Access if you don't want them to look at your books.)
When the money from that person hits your main bank account, explain that transaction in your main bank account with type Money Received from User, and reason Capital Introduced (if you're a sole trader or partner), or reason Payment to Director Loan Account (if your business is a limited company).
Then when you pay the individual back, explain those transactions with type Money Paid to User, reason Drawings (if you're a sole trader or partner), or Payment from Director Loan Account (if your business is a limited company).
FreeAgent is registered with the Financial Conduct Authority under the Payment Services Regulations 2017 (register no. 799763) for the provision of account information services.
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