If I lend money to my corporation, can it repay me without a dividend?

Arsen Accounting Services · Question 185 · Sources checked October 29, 2026

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A genuine loan from you to the corporation is different from money you borrow from it. Repayment of the documented loan principal generally does not become a dividend merely because you are a shareholder. The records must show that the corporation actually owes you the amount.

Establish the debt clearly

Keep the original funding, business expenses paid personally, repayments, and any interest separately recorded. A credit in the shareholder-loan account should reconcile to supporting transactions rather than serve as a convenient balancing entry.

If the corporation pays interest, the shareholder's income reporting and the corporation's deduction must be reviewed. CRA's T5 guidance includes interest on money loaned to a corporation among the relevant reportable payments.

Official guidance: [1], [2].

Check the balance before repayment

For example, an owner funds start-up equipment personally and later takes money back. Match the funding to invoices and the corporate ledger, then distinguish principal repayment from salary, dividends, interest, or personal spending paid by the company.

Keep a shareholder-funding file

• Bank transfers and expenses advanced on the company's behalf.
• Loan agreement or corporate acknowledgment.
• Interest terms and annual calculations.
• A running balance showing every repayment.

Ask your preparer to reconcile the shareholder account before large withdrawals. If the balance crosses from the company owing you to you owing the company, different shareholder-loan rules can become relevant. Do not assume the original loan permits unlimited future withdrawals, and do not erase supporting records once the cash has been repaid.