Hi, I do the accounts for the (very) small business I run, and have a query regarding loans.
Should one business make a small loan to another (say <3k) is there a requirement for interest to be charged on that loan?
If so what are the standard requirements/conditions for charging interest? For instance if the amount is repaid within a year could it be interest free? If not, what is the minimum time period over which interest has to be charged (e.g. monthly, quarterly?).
Are there any other important conditions to be aware of regarding loans between companies e.g. required paperwork etc?
Would greatly appreciate any advice. Not an accountant here but do have some experience doing basic accounts for small business.