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Definition
Interest suspense is an accounting treatment on the lender’s side: when a loan is impaired and interest recovery is doubtful, the lender suspends recognising that interest as income. For the borrower it signals the facility is in trouble, often alongside default interest and arrears.
In plain terms
It is a red flag on the lender’s books that a loan has gone bad — the interest is no longer being counted as real income.
Why it matters for your company
If your facility reaches this point, engage the lender urgently on a restructure. See default interest and arrears.
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Default interest
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Arrears
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Penalty interest
Penalty interest is an extra charge for breaching loan terms — but on business lending it must reflect a…
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Accrual accounting (interest)
Accrual accounting records interest in the period it relates to, matching cost to the time the money was…
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