Balloon Payment
Content
Definition
Balloon Payment is a large, lump-sum payment scheduled at the end of a series of considerably smaller periodic payments, a term relevant in structured financing agreements.
Usage and Context
Balloon payments are often seen in mortgages or car loans. People choose them to have low payments now and pay a lot later.
Frequently asked questions
- What is lump sum balloon payment? A balloon payment is a big one-time payment made at the end of a loan term. It follows smaller, regular payments made throughout the loan`s life.
- How do you value a startup pre revenue? Startups without revenue are valued based on factors like team, technology, and market potential.
- Which valuation method is best for startups? For startups, the best valuation method depends on factors like stage, industry, and available data.
Benefits
A balloon payment allows businesses to make smaller payments now. It helps manage cash flow better in the early stages.
Conclusion
A balloon payment lets you pay less month by month. Then, you pay a big amount at the end.
