Glossary

Intercompany loan

An intercompany loan is money lent between companies in the same group — a common way to move funding to where it's needed, but one that needs proper documentation and care on tax.

2 min read

Within a groupBetween related companies

Document itTerms and interest matter

Definition

An intercompany loan is a loan made between two companies under common ownership — typically parent to subsidiary or between sister companies — to fund operations, investment or cash-flow gaps across the group.

In plain terms

It's the group lending to itself, shifting cash from a company that has it to one that needs it, rather than everyone borrowing externally.

Why it matters for your company

These loans should be properly documented with real terms and, often, a commercial interest rate, or they attract transfer-pricing and tax attention. External funding still has a place — see group company borrowing.