# Types of loan repayment

The following types of reimbursement will be discussed below:

BULLET;

FRENCH-STYLE AMORTISATION;

FRENCH-STYLE AMORTISATION WITH PRE-AMORTISATION;

ITALIAN-STYLE AMORTISATION

MULTIBULLET

AMORTISATION with BALLOON

DYNAMIC

N.B.: loans called "amortising" on the platform assume French-style amortisation.

For the duration of the loan (usually 12 months to 8 years) the borrower pays interest-only instalments.

The principal is repaid in full at maturity

ADVANTAGES:

- Allows access to immediate liquidity.

DISADVANTAGES

- It is very expensive for the borrower to repay.

- 10000€ capital loaned

- TAN= 5% monthly interest= 0.05/12=0.004167

- 12 monthly instalments

For the first 11 months €41.67 per month will be repaid (10000€ * 0.004167), at month number 12 €10000 (capital initially lent) + €41.47 will be repaid.

- The instalment (interest + capital) is constant over time.

- At the beginning of the loan, the instalments are made up of a higher interest rate, whereas towards the end of the loan the interest rate decreases and the principal rate increases.

- In short: the interest payments are decreasing, the capital payments are increasing.

- ADVANTAGES: The borrower knows exactly how much he has to pay in and the number of instalments.

- DISADVANTAGES: As time goes by, it becomes less and less worthwhile to pay off the debt early because the interest is all paid in the first few instalments.

- 10000€ capital loaned

- TAN= 5% monthly interest= 0.05/12=0.004167

- 12 monthly instalments

- During the pre-amortisation period, only the interest payments are made, so the outstanding debt remains unchanged.

- Once the grace period is over, refer to the classic French-style amortisation (discussed above).

- 10000€ capital loaned

- TAN= 5% monthly interest= 0.05/12=0.004167

- 12 monthly instalments

- Pre-amortisation of 2 months

- The capital portion is constant

- The interest linked to the outstanding debt varies and decreases over time; this implies that the instalment, unlike French amortisation, varies and decreases over time.

- 10000€ loaned capital

- TAN= 5% monthly interest= 0.05/12=0.004167

- 12 monthly instalments

-Interest paid monthly, calculated on the basis of the remaining capital. They are constant between each capital payment

-Capital share is constant and is paid out every X months.

- 100€ capital loaned

- TAN= 8%

- 24 monthly installments

In this type of project, a part of the capital is amortized monthly, during its duration, as in amortising type financing.

The other part, as in classic bullet financing, will be repaid through an additional payment (balloon), which will occur at the end of the project.

As you can see, we have implemented the dynamic loan. The dynamism of this type of loan is due to three factors:

the principal is repaid by the companies (borrowers) dynamically according to their turnover (no pre-determined repayment schedule);

the only cost for the company (return for the investors) is a pre-determined fixed value (no annual interest rate) which is also paid dynamically as the principal is repaid;

the dynamic loan has a final maturity where, if the monthly repayments have not been sufficient to repay capital + fees, the full amount due will be repaid by the financed company.

The return for investors will therefore be proportional to the company's income: you will start from an agreed fixed minimum and this can be increased according to your performance. By how much? Here's the pleasant surprise: the more promising the growth project we have chosen to invest in, the higher our return will be.

#8. COMPOSITE

Composite is a type of project that allows an annual or multi-year contract with periodic billing to be advanced by collecting it at one time. The company will then pay the installments at the scheduled collections.

BULLET;

FRENCH-STYLE AMORTISATION;

FRENCH-STYLE AMORTISATION WITH PRE-AMORTISATION;

ITALIAN-STYLE AMORTISATION

MULTIBULLET

AMORTISATION with BALLOON

DYNAMIC

N.B.: loans called "amortising" on the platform assume French-style amortisation.

# 1. BULLET REPAYMENT

For the duration of the loan (usually 12 months to 8 years) the borrower pays interest-only instalments.

The principal is repaid in full at maturity

ADVANTAGES:

- Allows access to immediate liquidity.

DISADVANTAGES

- It is very expensive for the borrower to repay.

### EXAMPLE OF BULLET REPAYMENT

- 10000€ capital loaned

- TAN= 5% monthly interest= 0.05/12=0.004167

- 12 monthly instalments

For the first 11 months €41.67 per month will be repaid (10000€ * 0.004167), at month number 12 €10000 (capital initially lent) + €41.47 will be repaid.

# 2. FRENCH-STYLE AMORTISATION

- The instalment (interest + capital) is constant over time.

- At the beginning of the loan, the instalments are made up of a higher interest rate, whereas towards the end of the loan the interest rate decreases and the principal rate increases.

- In short: the interest payments are decreasing, the capital payments are increasing.

### ADVANTAGES AND DISADVANTAGES FRENCH-STYLE AMORTISATION

- ADVANTAGES: The borrower knows exactly how much he has to pay in and the number of instalments.

- DISADVANTAGES: As time goes by, it becomes less and less worthwhile to pay off the debt early because the interest is all paid in the first few instalments.

### EXAMPLE OF FRENCH-STYLE AMORTISATION

- 10000€ capital loaned

- TAN= 5% monthly interest= 0.05/12=0.004167

- 12 monthly instalments

# 3. FRENCH-STYLE AMORTISATION WITH PRE-AMORTISATION

- During the pre-amortisation period, only the interest payments are made, so the outstanding debt remains unchanged.

- Once the grace period is over, refer to the classic French-style amortisation (discussed above).

### EXAMPLE OF FRENCH-STYLE AMORTISATION WITH PREAMORTISATION

- 10000€ capital loaned

- TAN= 5% monthly interest= 0.05/12=0.004167

- 12 monthly instalments

- Pre-amortisation of 2 months

# 4. ITALIAN-STYLE AMORTISATION

- The capital portion is constant

- The interest linked to the outstanding debt varies and decreases over time; this implies that the instalment, unlike French amortisation, varies and decreases over time.

### EXAMPLE OF ITALIAN-STYLE AMORTISATION

- 10000€ loaned capital

- TAN= 5% monthly interest= 0.05/12=0.004167

- 12 monthly instalments

# 5. MULTI-BULLET

-Interest paid monthly, calculated on the basis of the remaining capital. They are constant between each capital payment

-Capital share is constant and is paid out every X months.

### MULTI-BULLET EXAMPLE

- 100€ capital loaned

- TAN= 8%

- 24 monthly installments

# 6. AMORTISATION with BALLOON

In this type of project, a part of the capital is amortized monthly, during its duration, as in amortising type financing.

The other part, as in classic bullet financing, will be repaid through an additional payment (balloon), which will occur at the end of the project.

# 7. DYNAMIC LOAN

As you can see, we have implemented the dynamic loan. The dynamism of this type of loan is due to three factors:

the principal is repaid by the companies (borrowers) dynamically according to their turnover (no pre-determined repayment schedule);

the only cost for the company (return for the investors) is a pre-determined fixed value (no annual interest rate) which is also paid dynamically as the principal is repaid;

the dynamic loan has a final maturity where, if the monthly repayments have not been sufficient to repay capital + fees, the full amount due will be repaid by the financed company.

The return for investors will therefore be proportional to the company's income: you will start from an agreed fixed minimum and this can be increased according to your performance. By how much? Here's the pleasant surprise: the more promising the growth project we have chosen to invest in, the higher our return will be.

#8. COMPOSITE

Composite is a type of project that allows an annual or multi-year contract with periodic billing to be advanced by collecting it at one time. The company will then pay the installments at the scheduled collections.

Updated on: 28/06/2022

Thank you!