Introduction
Conduit debt is a type of financing that has become increasingly popular among businesses seeking to access capital for various projects. This guide provides a comprehensive overview of conduit debt, its advantages, and how businesses can leverage this financing tool to drive growth and success.
1. Lower Interest Rates
Conduit debt offers lower interest rates compared to traditional bank loans, as it is typically backed by the creditworthiness of the underlying assets.
Interest Rates on Conduit Debt | Interest Rates on Bank Loans |
---|---|
4-6% | 6-8% |
2. Flexible Repayment Terms
Businesses can tailor conduit debt repayment terms to align with their cash flow and financial projections, ensuring flexibility and long-term affordability.
Repayment Term Options |
---|
10-20 years |
Fixed or variable rates |
Interest-only or principal and interest |
3. Access to Long-Term Funding
Conduit debt provides long-term funding, allowing businesses to invest in major projects with confidence and spread out repayment over an extended period.
Loan Duration |
---|
5-25 years |
Can fund large-scale capital projects |
Helps avoid short-term debt traps |
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