Balloon Payment
Short definition
A balloon payment is a large residual principal due at maturity on a partially amortising loan. It is a hybrid wall between a full bullet and full amortisation.
Detailed explanation
Interim instalments cut some principal; the residual is paid in one shot (or a short window) at the end. DSCR is easier than a fully amortising loan in interim years and heavier at maturity.
Refinancing, an asset sale or cash build must be planned to clear the balloon. Without a plan, the balloon is a stealth bullet.
Why it matters for the CFO
If capacity and the 13-week budget miss the maturity year, the covenant stays green and cash turns red.
How to read it
Balloon / opening principal shows how much of the hybrid is a bullet. A residual of 50%+ is a refinancing loan in practice.
Numerical example
200 mn TL loan, 80 mn TL principal paid over 5 years, 120 mn TL balloon at maturity plus that year’s interest.
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Definitions are educational. They are not investment, credit or tax advice.