NetLoan - Record Initial Disbursement

Overview

Paying out the initial loan amount is a two-part process. When you create a loan, NetLoan generates a NetLoan Initial Balance Entry that records the loan balance on the books and posts the offsetting side to the Loan Proceeds / Origination Clearing account mapped on the loan type — it does not move cash on its own. You then post a separate transaction that clears that clearing account against cash, and that transaction is what actually records the disbursement (Lender) or receipt (Borrower) of funds. This article covers both the Lender and Borrower sides, plus non-monetary loans where the proceeds fund an asset instead of cash.

Prerequisites

  • The loan type has its Loan Proceeds / Origination Clearing account (and, for go-live scenarios, its Go-Live Clearing account) mapped.
  • The system Go-Live date is configured.
  • The loan record is created with the Entity Type set (Lender or Borrower) and the Initial Loan Balance entered.
  • Standard NetSuite permissions to create the transaction you'll use to clear the clearing account (Journal Entry, Check, or Credit Memo).

Step-by-Step

Navigation

  • Initial Balance Entry: Run it from the Monthly Journal Processing page (NetLoan > Process Monthly Transactions > Monthly Loan Transactions).
  • Clearing transaction: Created as a standard NetSuite transaction (Journal Entry, Check, or Credit Memo) — no NetLoan-specific path required.

The workflow is the same shape for both entity types: run the Initial Balance Entry, then clear the clearing account. The account directions differ, so the Lender and Borrower flows are shown separately below.

Lender: Disburse the Loan Amount

  1. Confirm the loan's Entity Type is Lender and the Initial Loan Balance is set to the amount being lent. (For capitalized origination fees, see Considerations sectin below — the fee must be included in this field.)
  2. On the Monthly Journal Processing page, generate and run the Initial Balance Entry for the loan. NetLoan records the loan receivable on the books and posts the offset to the Loan Proceeds / Origination Clearing account.
  3. Post a transaction to clear the clearing account and record the cash going out to the borrower: debit Loan Proceeds / Origination Clearing and credit Cash / Bank. Any transaction type works as long as the GL nets to that result — a manual Journal Entry, a NetSuite Check, or a Credit Memo converted to a customer refund are all acceptable.
  4. Confirm the Loan Proceeds / Origination Clearing account nets to zero for this loan, and reconcile the account.

Borrower: Record Receipt of Proceeds

Use this when your own company is the borrower (Entity Type Borrower, which uses the Vendor field for the lender).

  1. Confirm the loan's Entity Type is Borrower and the Initial Loan Balance is set.
  2. On the Monthly Journal Processing page, run the Initial Balance Entry. NetLoan debits the Loan Proceeds / Origination Clearing account and credits the loan liability account (for example, Loan Liability – Long Term) mapped on the loan type.
  3. Post a transaction to clear the clearing account and record the cash received: debit Cash / Bank and credit Loan Proceeds / Origination Clearing.
  4. Confirm the clearing account nets to zero for this loan, and reconcile.

Non-Monetary / Asset-Financed Loans

Use this when the loan proceeds fund an asset directly rather than moving cash to a bank account (for example, a loan that finances the purchase of a vehicle or piece of equipment).

  1. Create and run the Initial Balance Entry as usual — NetLoan posts to the Loan Proceeds / Origination Clearing account the same way.
  2. Instead of clearing against Cash, clear the Loan Proceeds / Origination Clearing account against the fixed-asset account (or a fixed-asset clearing account) for the asset being financed.

Considerations

  • Initial Balance Entry vs. Go-Live Entry. Both put the loan balance on the books; which one NetLoan generates is driven by dates. If the loan's Origination Date is on or after the system Go-Live date, NetLoan generates a NetLoan Initial Balance Entry (using the Loan Proceeds / Origination Clearing account). If the Origination Date is before the Go-Live date, it generates a NetLoan Go-Live Entry (using the Go-Live Clearing account). You can switch the transaction type between Initial Balance and Go-Live on the Monthly Journal Processing page. Reconcile whichever clearing account was used.
  • Any transaction type can clear the account. The only requirement is that the GL nets correctly (Lender: debit clearing, credit cash; Borrower: debit cash, credit clearing). If you use a Credit Memo converted to a customer refund, confirm the resulting GL matches this before relying on it.
  • Disbursement vendor alternative. If a disbursement vendor is set on the schedule line, NetLoan generates the disbursement bill for you through the Disbursement Item / Origination Clearing account, rather than you posting the clearing transaction manually.
  • Dynamic Schedules. The Initial Balance Entry is produced from the loan header information — no transaction sync is required to generate it.
  • Watch for unintended syncing. A manual clearing transaction (or a Credit Memo used for the payout) that is tagged to the loan at the line level can be pulled into the Sync Transactions page. Avoid tagging the clearing transaction to the loan at the line level so it isn't treated as a syncable loan transaction.

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