A signed BV loan agreement is only the start

The Dutch Tax Administration recommends recording the parties, principal, term and repayment, interest and its calculation, security and the consequences of default. The normal order is simple: decision and agreement first, movement of funds second.

A later agreement does not necessarily make the facts irreparable, but it weakens the evidence. The terms can look like an explanation invented after the transfer rather than a company decision made in advance.

Anna borrowed €300,000 from her BV. The agreement required annual interest payments and principal repayments of €30,000. The accountant capitalised the interest each year, but no cash moved from Anna’s private account. After three years the balance had grown although the agreement promised the opposite.

One new signature does not resolve this. The ledger and bank history must be reconstructed, the departure explained, repayment capacity reassessed and the future route agreed before the next reporting date.

The first part is the lending decision and agreement. The second is the rate analysis using a comparable term, risk and security. The third evidences the value and ranking of security. The fourth reconciles the loan ledger and bank. The fifth records later changes: an extended term, new advances, lower income or reduced collateral value.

Where two parts conflict, the issue remains open. The agreement may require monthly interest while the ledger records an annual accrual; bank payments may have no reference; collateral may have fallen in value without a review.

The Dutch expression zakelijke voorwaarden means businesslike or arm’s-length terms. It is not one universally correct interest rate. An independent lender examines the term, schedule, debtor risk, security and repayment capacity together.

A high rate cannot always repair a loan that could never realistically be repaid. Conversely, a carefully performed arrangement with a clear purpose and evidenced risk has a stronger story than a perfect template with no payments behind it.

Once a year, reconcile the agreement, balance, interest, payments, security and financial position. If the terms need to change, record the reason and decision before changing the parties’ conduct.

The review also supports succession. A replacement director or the heirs can understand why the loan exists, what remains due and which money still belongs to the company.