Question: During the last year you have had a loan commitment
During the last year, you have had a loan commitment from your bank to fund inventory purchases for your small business. The total line available was $500,000, of which you took down $400,000. 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 $400,000) of $3,250 on this loan commitment. You remember that the up-front fee was 50 basis points. Calculate the back-end fee on this loan commitment.
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