Loans
Before you start, open these pages: Cash / Loans, Cash / Shared Funds and Sales / Contacts.
Can’t find one? It may be turned off for your business, or your account may not be allowed to open it. Ask the person who set up your FeePrime. They can fix both.
A loan lends money from a shared fund to a member. It is the reason most savings groups exist in the first place.
What a loan records
- The contact borrowing the money.
- The pool the money comes out of.
- The loan amount.
- The return amount.
- A deadline.
Notice the shape of that. The amount borrowed and the amount to be returned are recorded as two separate numbers. Not as a percentage.
Why an amount, and not a rate
Because the amount is what both people actually agreed.
“Borrow 100,000, return 115,000 by the end of March” is a sentence a member understands completely and cannot misread.
An interest rate invites arguments. Does it compound? How are the days counted? Was the fee included? A group of neighbours does not want to have any of those arguments.
Recording the two amounts means the loan says exactly what was promised, and the deadline says when.
The money comes out of a pool
A loan comes out of one specific pool. That is what keeps the fund’s sums correct. Money lent out has left the pot, and is owed back to it.
This is why pools and loans are in the same course. A shared fund with lending is one system. Contributions in, loans out, repayments back. Understand one half without the other and the numbers look random.
Deadlines between people who know each other
The deadline is not a legal weapon. In most member organisations it is a social one. It is the date the committee will ask about it, in front of people whose opinion the borrower cares about.
That works. And it works better when the date is written down rather than remembered.
A deadline in the system is a fact. A deadline in somebody’s memory is an argument waiting to happen between two people who will still see each other every week.
Lending is where trust gets tested
Everything from the shared fund lesson matters more here. A second person approving. The audit trail. Never deleting anything.
Add one thing the system cannot make you do. The members whose money it is should be able to see the terms.
A fund where only the treasurer knows who borrowed what is a fund heading for a difficult meeting, no matter how honest the treasurer is.
Try it
On staging.feeprime.com, lend from a pool to a member, with a return amount and a deadline. Then run the loans summary and see how what is still owed is shown.