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Definition
A bullet loan (or interest-only loan) keeps regular payments low by deferring all the capital to a single repayment at maturity. It is common in bridging finance, where the capital is cleared from a specific future event such as a property sale or a refinance.
In plain terms
It frees up cash flow during the term but concentrates all the capital risk at the end. It only works if you have a clear, reliable way to repay the lump — the "exit".
Why it matters for your company
Never take a bullet or bridging loan without a credible exit for the final payment. See bridging finance and balloon payment.
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