Loan Fees for Line of Credit - Spidell

Loan Fees for Line of Credit

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Message Board Loan Fees for Line of Credit

This topic contains 3 replies, has 3 voices, and was last updated by Anonymous 3 weeks, 3 days ago.

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  • #174163
    Anonymous

    If we have to pay $100,000 of fees for a $20,000,000 Line of Credit at a lending institution, I want to properly amortize those loan fees for tax purposes.  I know for a regular term loan, it is easy.  However, we just draw on the loan whenever funds are needed.  How does amortization work in this instance?

  • #174248
    Lynn Freer
    Participant

    I assume you have to pay the fees up front? If so, I would amortize them as you would on a regular loan.

  • #174328
    William Dewberry
    Participant

    A LOC is ususaly for a fixed term, usually 1 year. You amortize the fees over the life of the term, draw or dont draw on the line make no difference.

  • #174420
    Anonymous

    Thanks for the help.  The client found the terms (2 years), so we will amortize accordingly.