Question

During the last year, you have had a loan commitment from your bank to fund working capital for your business. The total line available was $17 million, of which you took down $13 million. It is now the end of the loan commitment period and your bank had you pay the back-end fees. You have misplaced the paperwork that listed the terms of the commitment, but you know you paid total fees (this does not include any interest paid to borrow the $13 million) of $72,500 on this loan commitment. You remember that the back-end fee was 75 basis points. Calculate the up-front fee on this loan commitment.




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  • CreatedSeptember 23, 2014
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