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INTERIM RENTS

Interim rent was originally conceived to compensate commercial lenders for the time their funds were invested beyond the traditional 30 days for the next first scheduled monthly payment of a lease. This concept is also employed in consumer real estate loans when ‘extra interest’ is charged for the days between an existing loan being paid off and the new loan becoming due. At its core this concept makes sense. Let’s assume a lender funds a loan or a lease on the first of the month and the next payment is scheduled on the 15th of the following month. Most lenders’ original calculations assume that payments will be made every 30 days and in the scenario above the first payment was actually due in 45 days. There are 15 days that the lender does not have the use of their funds and for which time they are not being compensated. So the logical solution is to pay the lender ‘interest’ at the same rate as the loan or lease is structured at for the extra 15 days. Seems fair but that’s not what’s being done by most commercial lenders. read more

EVERGREEN CLAUSES

When you enter into a leasing agreement or other financial contract, it’s crucial to know exactly what you’re signing up for. While an evergreen clause may look standard and harmless, it is a loaded financial tool that can potentially harm your finances.

Protecting yourself and your business from detrimental financial deals begins with getting informed. That’s why we’re discussing what an evergreen clause is and how to examine evergreen contract language before signing on the dotted line.

Read on to learn about evergreen financing and how it affects a business. read more

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