Shareholder loan

Okay kiddo, so imagine you own a toy store and your friend wants to borrow some money from you to buy toys for their own store. You have some extra money that you're not using, so you give it to your friend with the understanding that they will pay you back.

A shareholder loan is like that, but instead of a toy store, it's a company and instead of a friend, it's a shareholder or owner of the company. Sometimes the owners of a company need some extra money to help the business grow or cover expenses, so they borrow money from the company.

The loan works just like any other loan - the shareholder agrees to pay the company back within a certain amount of time, with interest if applicable. The money borrowed can only be used for business purposes, not personal use like buying toys.

It's important for companies to keep track of shareholder loans because it affects the company's financial statements and could impact their ability to pay bills and creditors. Overall, it's a way for businesses to help their owners when they need some financial assistance.