Accrued Interest

Interest on a loan accumulated over a period of time either as an expense (for the borrower) or revenue (for the lender) and paid at maturity or final payoff.

In the case of some real estate debt instruments and other bridge financing, structuring accrued interest can provide the borrower with flexibility – with respect to the repayment schedule – while offering the lender or investor a more attractive total return. Many of EquityMultiple’s preferred equity investments offer both a current preferred return and a total, accrued return, which effectively functions as accrued interest.

For more on accrued interest and accounting principals, please refer to this article.

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