Posted by Michael Morrongiello on October 13, 2009 at 01:06:01:
In Reply to: Very Large Note $ 5,000,000 posted by Cy on October 12, 2009 at 22:54:01:
Cy:
Just my .02 cents..
My initial take is that to write the Note where there are no monthly instlalments or other regular installments due and where interest accumulates and then BALLOONS is very dangerous.This loan with these terms will not be very favorably viewed regardless of the security for repayment.
Far better to call for monthly installments with AMORTIZING DEBT to take place even if the interest rate has to be lower, etc.
Wall Street and now even Main Street are realizing ALL Across the country that interest only loans with balloons are being extended, are maturing without being taken out, and that credit is SO tight that you cannot rely on a future balloon payment to be taken down when due.
I also assume that someone personally will be standing behind this debt and guaranteeing its repayment?
Michael Morrongiello