What is a Balloon Note?
As an alternative to making payments on a loan or mortgage that are equal in size and type for the duration of the loan period, there is the possibility of a balloon note. Essentially, a balloon note allows for the extension of a mortgage or loan, with the provision that the regularly schedule payments will be low. At the end of the loan period, a substantial payment will be required to pay off the remainder of the outstanding balance. Here are some examples of when a balloon note arrangement may be a sound financial move. Balloon notes are often utilized within business operations. One of the advantages of structuring a long-term loan as a balloon note is that it provides a corporation with a relatively low amount of resources required to meet the monthly obligation of the loan. At the same time, the balloon note arrangement provides the company with time to build up additional resources that can be used to retire the debt when it comes due. Companies that anticipate additional sales
