Jump to content

Main menu Navigation ●Main page ●Contents ●Current events ●Random article ●About Wikipedia ●Contact us ●Donate Contribute ●Help ●Learn to edit ●Community portal ●Recent changes ●Upload file

●Create account ●Log in ●Create account ● Log in Pages for logged out editors learn more ●Contributions ●Talk

(Top) 1 Applications 2 See also 3 References 4 External links

Shareholder loan

●Deutsch ●עברית Edit links ●Article ●Talk ●Read ●Edit ●View history Tools Actions ●Read ●Edit ●View history General ●What links here ●Related changes ●Upload file ●Special pages ●Permanent link ●Page information ●Cite this page ●Get shortened URL ●Download QR code ●Wikidata item Print/export ●Download as PDF ●Printable version Appearance From Wikipedia, the free encyclopedia

Shareholder loan is a debt-like form of financing provided by shareholders. Usually, it is the most junior debt in the company's debt portfolio. On the other hand, if this loan belongs to shareholders it could be treated as equity.^[1] Maturity of shareholder loans is long with low or deferred interest payments. Sometimes, shareholder loan is confused with the inverse, a loan from a company that is extended to its shareholders.

Applications

[edit]

This form of financing is quite common while funding young companies with positive cash flows because such firms are still not able to raise debt from banks but need debt anyway to create a tax shield.
The contribution of shareholder loans to a corporation's capital structure generally relieves the corporation's debt load and is, therefore, used in leveraged buyouts to manage a degree of leverage.
Shareholders can extend the loan in distressed or near-default situations to save the company.^[2]