This article will provide detailed written and video instructions that walk you through all the steps required to add Debt Positions to your Project (from creating a Debt Class to issuing Promissory Notes).

Table of Contents:

Step-by-Step Instructions:

Part 1: Create a Debt Class

Step 1. From within the relevant Project, select the Classes tab.

Step 2. Select the '+ Create Class' button to create a new class.

Step 3. Add any name and select 'Debt' in the 'Class Type' drop-down menu.

Then click the 'Create Class' button:

Part 2: Add a new Position

Step 1. From the 'Positions' tab, select '+New Position'.

Step 2. Select the relevant 'Account' from the drop-down menu and click 'Create Position'.

NOTE: If the Account does not appear in the drop-down, it already has a Position in the Project and this step can be skipped.

Step 3. Click on the newly added 'Position'.

TIP: Searching in the Account column will help find the relevant account.

Part 3: Add a Promissory Note

Step 1. From within the Position, click on the blue '+New Transaction' button, then select 'Promissory Note'.

Part 4: Complete Promissory Note Details

Step 1. Fill in the Main Properties details in the pop-up box:

Date: The inception (start) date of the Note.
Debt Class: Select the newly added Debt class.
Amount: Enter the amount of principal.
Interest Rate: Specify the interest rate as a percentage.
Term: Select between three options for the term of the note: Maturity Date (specific date), Term (number of months), or Indefinite (ongoing).
Rounding Method: specify the rounding method to be used.

Step 2. Use the Accrual and Compounding section to select how the platform will calculate the Note's interest.

Select one of the 3 options to define the interest accrual method:

Option 1: Day Count Basis:

30/360: Use this option if you want Interest payments to be the same each month/quarter. This method calculates daily interest using a 360-day year, then multiplies by the number of days elapsed in the period, while treating each month as a standardized 30-day month.
Actual/Actual - calculates the daily interest using the actual number of days in the year and then multiplies that by the actual number of days in each time period. This will result in payments that vary from month to month and also factor in the extra day of a leap year.

Actual/365 - calculates the daily interest using a 365-day year and then multiplies that by the actual number of days in each time period. This will result in payments that vary from month to month, but it does not factor in a leap year.

Actual/360 - calculates the daily interest using a 360-day year and then multiplies that by the actual number of days in each time period. This will result in payments that vary from month to month, but it does not factor in a leap year.

30E/360 - calculates the daily interest using a 360-day year and then multiplies by the days elapsed in the time period, but treating every month as a standardized 30-day month, with the exception that February is not treated specially.

Option 2: Amortization Schedule

Designed for fixed, even payments over time. Each payment stays consistent, which is ideal if you want predictable, regular repayments.
The InvestNext system will not automatically amortize your distribution payments between principal and interest. In order to do this, run a custom distribution and manually add the interest and principal payment.

Option 3: Flat Rate

A fixed interest rate applied consistently, without day-based variations.

First Payment Date:

The First Payment Date will not change based on the selected Day Count Basis. The day count does impact the amount of interest earned.

For 30/360 Day Count Basis, if the Note start date is set to the 25th of a month, the First Payment Date would be set to the 24th of the following month. No matter how many actual days are between the 25th of a month and the 24th of the following month, the platform will always use 30 days to calculate the interest.

For example:
- First payment period: Aug 25, 2025, through Sept 24, 2025
- Second payment period: Sept 25, 2025, through Oct 24, 2025
- Third payment period: Oct 25, 2025, through Nov 24, 2025 and so on.
When paying Monthly with Interest Due set to Monthly:
You can make the distribution on the first payment date or on any day after. The platform will pay only the interest ACCRUED during the Month. It will not pay any interest that may have accrued on days AFTER the payment date UNTIL a FULL MONTH has elapsed from that payment date.
For Actual/Actual or Actual/365: From August 25 - Sept 24, there are actually 31 days. Using these options, interest will be based on 31 days vs. 30/360, which is always 30 days. (Sometimes there will only be 30 days. When you get to Feb there may be 28,29 days. The interest will fluctuate based on the number of days that have gone by during that period of time.)

NOTE FOR DISTRIBUTIONS

When paying Monthly and "Interest Due" is set to Monthly:

You can make the distribution on the First Payment Date or on any day after that date. The system will pay only the interest ACCRUED during the Month. It will not pay any interest that may have accrued on days AFTER the payment date UNTIL a FULL MONTH has elapsed from that payment date.

The system will treat each "Interest Due" option the same way, using the option you selected when setting up the note.

NOTE: "Continuously" will accrue the interest daily and will pay all days the continuous interest has been accrued up to the date of payment in a distribution.

Step 3: Once complete, select Create Promissory Note.