allowableNon-cash
Interest expense
Interest on existing debt that will be refinanced or is already in the debt service calculation.
Rule
Add back to arrive at EBITDA. Interest on debt that will remain must then be captured in existing debt service, not double-counted.
Evidence lenders expect
- Debt schedule
- Lender statements
Worked example
As reported
Interest $41,800
In the memo
Added back; refinanced debt removed from post-closing service
The objection you will hear
Adding back interest while also excluding the related debt service.
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