Owner's loan

A business owner's loan account shows the amount of money the business owes the owner, or the amount of money the owner owes the business. For example, when a new business starts, the owner will use his/her own money to start the business and this is recorded in the loan account as money owing to the business. Likewise, if the owner withdraws money from the company (other than a salary), this is recorded in the loan account as money the owner owes the business.