In small businesses, cash flow is not an abstract word. It’s invoices that arrive late, payroll that doesn’t wait, VAT that comes on time whether your clients do or not. So when someone asks for “a temporary loan from the company” a shareholder, a director, a sister company, a trusted supplier, it can sound like a practical solution. One bank transfer, problem solved, relationship protected. But the moment your company lends money, you are not just being helpful. You are making a governance decision about risk, trust, and responsibility.
Dutch company law keeps the principle simple: directors must act in the interest of the company and its connected enterprise. And when your personal interest collides with that, what we call tegenstrijdig belang (conflict of interest), you are not allowed to quietly decide in the same room as your own benefit. In a BV, a conflicted director must step out of the discussion and decision-making; if that blocks a board decision, the decision shifts to the supervisory board, or otherwise to the shareholders’ meeting (unless the articles say differently).
That legal point matters because the practical risk is predictable: “we’ll pay it back soon” turns into “give us a bit more time,” and suddenly your company is carrying someone else’s financing problem. The law doesn’t require you to be a banker, but it does expect you to behave like a reasonably careful director. If you lend money irresponsibly and the company suffers damage, that can lead to director liability toward the company. And if things go wrong and insolvency enters the picture, trustees and courts tend to look very closely at large or risky loans, especially when they were made without proper assessment or safeguards.
I’ve seen the same situation more than once: an owner-manager advances a sizeable amount to a related party “because we trust each other,” with no real contract, no repayment schedule, no security, and no honest check of whether repayment is realistic. Six months later the BV is the one struggling, VAT and wage tax are due, suppliers are waiting, and the team feels the tension. At that point, the loan is no longer a friendly bridge; it’s a hole in your working capital. And if it was never truly repayable, there’s also the risk that the loan is treated as something else in hindsight, including as a profit distribution for tax purposes in certain shareholder-loan scenarios.
The good news is that “doing it right” is not complicated, it’s just disciplined. Make the decision in the right place (and document who was conflicted and who decided). Put the terms in writing, like you would if you were lending to a stranger: interest, repayment dates, what happens if a payment is missed, and what security is available. Ask the boring question you don’t want to ask: if this money doesn’t come back on time, what bill in your own business won’t get paid? That single question often exposes where the real risk lives: not in the balance sheet, but in next month’s liquidity.
A company loan can be sensible. Sometimes it protects a key relationship or prevents a bigger operational problem. But it deserves the calm seriousness of any decision that touches payroll, taxes, and trust. Treat the loan as a business transaction, not as a gesture. Step out when your own interest is involved, write it down, price it, secure it where you can, and revisit it before it quietly becomes “normal.” That’s not alarmism. That’s how you keep your business steady, and yourself out of unnecessary trouble.
