Informational article – Bússola Digital – Accounting & Consultancy, Sole Trader (ENI)
Shareholder loans are one of the most important and, at the same time, least understood instruments in the financial life of companies. In practice, they represent a flexible and recurring way for shareholders to finance the company, without changing share capital and without resorting to bank lending.
This article explores in depth the concept, the legal framework, the accounting impacts, and the essential precautions that business owners and managers should take when using shareholder loans.
Shareholder loans are loans granted by shareholders to the company, with the aim of strengthening its cash flow or financing specific needs.
Unlike capital contributions:
• they do not increase share capital,
• they do not change the ownership structure,
• they do not grant additional voting rights,
• and they must be repaid as the company’s financial capacity allows.
From a legal perspective, they are credits held by shareholders over the company, forming part of its liabilities.
Shareholder loans can arise at practically any stage in a company’s life. The most common scenarios are:
a) Incorporation and start-up phase
It is common for the initial share capital to be insufficient to cover start-up expenses such as setup costs, marketing, equipment or recruitment.
The shareholders then resort to shareholder loans to complement the initial financing.
b) Growth and expansion
Investment projects, opening new units or increasing stock levels may require additional liquidity.
Shareholder loans allow these needs to be financed without resorting to external credit.
c) Periods of lower liquidity
Situations involving temporary drops in sales, delays from customers, or increases in costs can create cash flow pressure.
Shareholder loans act as an immediate “financial cushion”.
d) Replacement of bank financing
When shareholders aim to avoid bank interest or when access to credit is limited, shareholder loans become an efficient alternative.
e) Financial rebalancing
In companies with low equity, shareholder loans can be used as a stabilisation tool, provided they are supported by a recovery strategy.
The Portuguese Commercial Companies Code expressly provides for shareholder loans, regulating:
• the possibility for shareholders to finance the company,
• the way in which these loans are recorded,
• and the conditions for their repayment.
The law also establishes important limits: the company cannot repay shareholder loans if this would compromise its solvency.
This principle protects creditors, employees and the company’s own continuity.
Shareholder loans are recorded as:
• Non-current liabilities (when there is no defined repayment term), or
• Current liabilities (when there is a contractual term or resolution for repayment).
The accounting treatment must be clear, transparent and supported by adequate documentation, such as:
• a shareholder loan agreement,
• a shareholders’ resolution,
• or a record in the minutes.
The absence of formalisation may create tax and corporate risks.
Advantages
• Flexibility and speed in obtaining liquidity.
• Avoid external financing costs.
• Do not alter the company’s ownership structure.
• Demonstrate shareholders’ confidence in the project.
Risks and precautions
• Repayment depends on the company’s financial availability.
• It may create excessive dependence on internal financing.
• Lack of formalisation may lead to conflicts between shareholders.
• In the event of insolvency, shareholders’ claims are subject to specific treatment and may be subordinated.
To ensure legal and financial security:
• Always formalise the shareholder loan (contract or minutes).
• Define repayment terms, even if flexible.
• Assess the impact on solvency before repayment.
• Ensure accurate accounting records.
• Integrate shareholder loans into the company’s overall financial strategy.
Shareholder loans are an essential tool in corporate management, allowing the company’s liquidity to be strengthened quickly and efficiently.
When used with proper rigour and an appropriate legal framework, they contribute to the company’s financial stability and sustainable growth.
For business owners, managers and accounting professionals, understanding this instrument is essential to making informed decisions and protecting the company’s financial health.
“Loja Verde, Lda.” starts its activity with a share capital of €5,000.
In the first months, unexpected expenses arise: software acquisition, digital marketing and stock replenishment. Cash flow becomes insufficient.
The shareholders meet and decide to make a €10,000 shareholder loan, recorded as a loan to the company.
Impact:
• The company obtains immediate liquidity.
• The share capital remains unchanged.
• The amount is recorded as a liability owed to the shareholders.
• Repayment will only take place when financial capacity is available.
This is a typical case in micro and small enterprises, where initial capital rarely covers all start-up needs.
“TechWave, SA.” is preparing to launch a new product.
The bank offers financing with high interest rates due to the project’s risk.
The majority shareholders decide to finance the company through shareholder loans, in the amount of €150,000, allowing the company to:
• finance product development,
• avoid external financing costs,
• maintain autonomy and speed of decision-making.
Later, when the product generates revenue and cash flow stabilises, the company resolves to partially repay the shareholder loans, without compromising solvency.
This example shows how shareholder loans can be a strategic alternative to bank credit, especially in phases of innovation or expansion.
March 2026
