Managing seasonal cash flows of a business can be an art and a science. For a lender, the key to success is making life easier for the borrower or lessee. One opportunity for Lenders/lessors is to structure loans or leases with monthly skipped or modified payments when appropriate and creating a win-win for both parties. This structuring can separate you from the competition.
Per diem interest is the interest charged on a loan on a daily basis. The finance charge is interest calculated since the last time a payment was made. Often, you have a loan payoff at a point in time and it doesn’t close and you need to determine the per diem interest for each day the loan doesn’t get paid off.