Can I claim my Square Capital Loan Payments ?

[lmt37]

I use square to process credit cards, they offer capital advances on future credit card sales, can I claim the interest @ 13%... make small payments based on my amounts processed. Thanks!

[DDollar]

Yes.  You can and should claim the interest you pay as a business deduction.

[lmt37]

Thanks!!

[DDollar]

You're welcome!  I'm glad I could be of help.  Thanks for using TurboTax!

[candcampbell]

How do you figure it out?take 13% away from the loan amount

[Cjbonilla]

Hi there! 

I have taken a few square capitol loans out before and paid them all off, but I have never written them off in my taxes. Before I submit my 2019 taxes, I wanted to know where do I put this deduction? 
also, to be clear, I am not able to write off the loan amount or the total that was paid, correct? I can only write off the fixed rate interest that was added to the loan amount upon accepting the fixed rate loan from square capitol? 

[HikingStick]

I realize this is a very late response for your question, but you should check with an actual CPA. Square loans do not charge interest. They are financed by a flat rate loan fee based on the amount you borrow. I know that sounds like interest, but I'd let a financial professional make the exact determination for you.

[ThomasM125 · Accepted solution]

Even if the loan fee may not technically be considered interest expense, it would represent a necessary and normal expense of doing business, so it can be deducted as a business expense. So, it will either be deducted as interest expense or bank/loan fees.

Interest expense is broadly defined as a fee associated with borrowing money that is based on a percentage times the amount borrowed.