If there was no "concurrent in time" paperwork that would normally be in place for a loan, then it would not be a loan. (I'm talking about a written note, including appropriate interest and specified repayment terms.)

If it is not a loan, then it is in fact additional capital contributions which go to the equity section.

It really does not matter if it is Additional Paid In Capital, as with him being the sole owner of the S Corp, he can take distributions at any time without tax consequences so long as they do not exceed his tax basis in the Corp.

BTW If he gets additional bank loans, you may want to ask to review all the loan covenants to be sure that there are not restrictions on distributions, so you can advise him about when he can return his investment without violating those covenants.