At a glance
1. Determine qualifying interest
For the loan-interest process, the starting amount is the portion of repayments above the principal advanced. A distribution should only run once the amount is eligible under the Fund Policy and can be supported by the loan and accounting records.
Total loan interest = qualifying repayments received − principal advanced2. Apply the configured allocations
The current configuration supplies the rates used by the software. Commission is only deducted when an eligible referrer exists; a borrower already receiving a nominated-relationship rate does not normally also generate referral commission.
Distributable balance = total interest − eligible commission − operating allocation − funding reserveThe remainder must be calculated from the rates actually stored for the run. It should not be inferred from a hard-coded percentage on a webpage.
3. Split the distributable balance
Reinvested for eligible holders by issuing shares at the price captured before the run. The configured fund-reserve portion is carved out before members receive their equity allocation.
Recorded as a held dividend for eligible adult holders. The current implementation reinvests a minor holder's portion instead of creating withdrawable cash.
4. Calculate each eligible member's share
The system uses the shares held by active, eligible members for that run. Suspended holders and the fund-reserve holding are excluded from the member allocation base.
Member ratio = member shares ÷ total shares held by eligible membersMember amount = relevant allocation pool × member ratioEquity is converted to new shares at one price captured before the distribution begins. The transaction records the contribution, new shares, share-ledger movement, held dividend and resulting NAV snapshot as one atomic process.
5. Accrual eligibility
The accrual pool is calculated from the funding reserve plus the equity portion, then divided among the configured purposes. Each purpose amount is allocated to eligible members using the same pro-rata ratio. These entries are borrowing eligibility—not segregated cash deposits.
Default allocation shown below. The live administrator configuration used for a distribution may differ and should be recorded with that run.
An accrual entry does not guarantee immediate funding. A later application remains subject to its purpose, documents, outstanding balances, policy limits, approval and available liquidity.
6. NAV and internal transfers
Moving money between two fund-controlled accounts does not, by itself, create value or increase NAV. NAV changes when assets, recognised income, expenses or liabilities change. Issuing new shares at the current NAV price increases both fund assets and shares proportionally; it should not mechanically increase NAV per share.
7. Approval, records and tax
- A proposed distribution is linked to a recorded resolution and the applicable director-vote threshold.
- The distribution register captures the interest, component amounts, holders credited and price per share.
- Share, dividend and accrual entries should reconcile to the approved pools after currency rounding.
- Tax treatment depends on current law and the member's circumstances. Members should not rely on this guide as tax advice.
No guaranteed distribution: a loan carrying interest does not guarantee profit or a member payment. Defaults, unrecovered principal, expenses, impairment, eligibility and board approval can affect whether any amount is distributable.