Entrepreneurs and loans

July 14, 20230

The conditions of modern business impose a number of problems on businessmen, especially entrepreneurs. The basis is the adoption of new business methods and models aimed at the long-term plans, but there is always a challenge with the business’s current liquidity. The problem of liquidity for entrepreneurs is all the more burdened by the fact that they are primarily natural persons who engage in one business activity with the aim of generating income, and as such they can usually only rely on themselves. The availability of loans is often not so much a long-term process as it is “paperwork”-challenging for entrepreneurs, and the pace of modern business is at such that it requires a prompt response. In such environment and pace, entrepreneurs very often resort to loans in order to solve the issue of current illiquidity.


Loans for liquidity, i.e. a liquidity loan agreementis an obligation which applies to two natural persons, to a natural person and a legal entity, but not to an entrepreneur. The question is why? Because the entrepreneurs do not have the status of a legal entity, they are  a natural person who performs activities and does not exist as a separate entity; therefore, there are no two contractual parties, thus there is no contractual possibility, or more precisely, no obligation. Recently, in practice, entrepreneurs have been receiving verbal explanations from their commercial banks how the payment of loans to entrepreneurs is prohibited, and even with the payment code 81, which they used. Many entrepreneurs who were compelled to overcome illiquidity,  without being able to use the payment code 81, and without consulting their accountants, opted for the payment code 65 – payment of daily goods sold cash deposit.  In the simplest terms, the consequence of this is that you have generated income, which is taxable and for which you need to check whether a fiscal cash register is required. Thus, one issue leads to another.


In the conditions thus created, a statement from the National Bank was made, in which it was stated:

“In order to provide complete and accurate information for payment service users, the National Bank of Serbia emphasizes that there is a legal basis for the payment of the founder’s liquidity loan in the case of an entrepreneur, and that it has not been prohibited by regulations under its jurisdiction.”


The National Bank of Serbia referred to the Decision on the Form, Content and Manner of Using Payment Order Forms for Dinar Payment Transactions (“Official Gazette of the RS”, Nos. 55/2015, 78/2015, 82/2017, 65/2018, 78/2018, 22/2019 and 125/2020) as well as the Annex to this Decision, which contains payment codes for cash, non-cash and settlement payments that payment service users use when filling out payment orders.

In its statement, the National Bank emphasized that there is a legal basis on which entrepreneurs can make payments for liquidity. This imposes the need to reiterate the essence of entrepreneurship, which states that an entrepreneur is not a legal entity and is liable indefinitely for their obligations arising from business, namely:

– with the assets they have invested in the business,

– but also with all of their assets (that is, those that they did not previously invest in their business)


Therefore, when we have the issue of solving the current liquidity of an entrepreneur, a loan, in the sense of a founder’s loan, does not exist as a possibility in the case of an entrepreneur (because there is no legal basis for it) since an entrepreneur as a natural person does not exist separately from their entrepreneurial activity. What does exist as a solution is investing capital in business, or more precisely using personal funds and assets for business purposes. From the accounting point of view, the changes are not on liabilities but on capital, for those entrepreneurs who are in the double-entry bookkeeping system.


The solution is not to use payment code 81 – Founder’s liquidity loan (which is intended for legal entities), but payment code 90 – Other transactions. Shall you have these or similar doubts and questions, the CREATIVE FINANCE TEAM is here to help you follow the pace of modern business as best as possible.


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