allowableNon-cash
Depreciation and amortization
Non-cash expense recognized on the return, added back for EBITDA and cash flow.
Rule
Always added back in EBITDA and CFADS. Lenders may subtract a maintenance capital expenditure estimate in cash flow analysis.
Evidence lenders expect
- Form 4562
- Fixed asset schedule
Worked example
As reported
Depreciation $92,300
In the memo
$92,300 added back; $35,000 maintenance capex deducted
The objection you will hear
Ignoring required capex for equipment-heavy businesses.
Package your next loan in 15 minutes instead of 3 weeks.
Upload a set of sample tax returns and generate a complete, lender-ready credit memo on your first day.