Wakefield Council says it is confident that a £3m loan it gave to another authority in severe financial difficulties will be repaid.
Northamptonshire County Council declared itself insolvent in July after it was revealed it had a £70m deficit. It is now struggling to set itself a budget to deliver frontline services.
Wakefield is one of 23 councils across the UK to have lent cash to Northamptonshire before the end of September.
But while a recent report said that some of those authorities expressed concern that they might not get their money back with interest, Northamptonshire has said those fears are "unfounded".
Lending money between councils has become a routine practice in recent years to help with cashflow.
And those in charge of the public purse strings in Wakefield, say they fully expect the money will be handed back on time before the end of the year.
Chief finance officer Neil Warren said: "We have made a short term loan to Northamptonshire Council of £3m, which is due to be repaid in December.
"We are confident the loan plus interest will be repaid to the timescale agreed."