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Bullet Payment
A one-time payment for the entirety of an outstanding debt, often due at the maturity of a loan, and sometimes relevant in M&A transactions involving debt financing.
Implications
A lump sum payment made at the end of a loan term, rather than through regular installments, often used in bond and mortgage agreements.
Example
Example: A real estate developer opts for a loan with a bullet payment due at the end of the project, minimizing cash outflows during construction.
Related Terms
Different from amortized loans, where payments are spread out over time, a bullet payment defers the full repayment to the end of the loan term.
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