I'm looking to raise a total of $250,000 in the form of personally-guaranteed promissory notes with a term of eighteen months and a fixed rate of return. The notes are offered with a base return of eight percentage points (APR). In addition, a capitalization bonus of up to four additional points (APR) is offered. Interest will compound monthly.
The bonus is calculated as the percentage represented by the amount of the note relative to the total capitalization sought. For example, a note in the amount of $125,000 would represent fifty percent of the total capitalization sought ($250,000). This would yield a capitalization bonus of two percentage points: four points at a fifty percent rate of capitalization (4 x 0.50). The total APR return for this example would be ten percent.
My hope is to repay these notes sooner than the full term of eighteen months. In that case, a pre-payment penalty will apply in the amount of one-third of the remaining interest. I will continue using the example of the $125,000 note at ten percent APR. If the full amount of the funds were utilized for the entire eighteen months, the interest payable at the end of that term would be $20,139.04. If that note were repaid after six months, the interest payable would be $6,381.66 for the six months the funds were actually utilized, plus one-third of the interest amount for the remaining twelve months (0.3333 * $13,757.38, or $4,585.79), bringing the total interest payable at the end of six months to $10,967.45.
In order to ensure repayment of the notes in the event of my untimely demise, I will take out a term life insurance policy and make legal arrangements sufficient to cover the principal and interest payable to all note holders.
Serious interested parties please respond by PM. Thank you.
The bonus is calculated as the percentage represented by the amount of the note relative to the total capitalization sought. For example, a note in the amount of $125,000 would represent fifty percent of the total capitalization sought ($250,000). This would yield a capitalization bonus of two percentage points: four points at a fifty percent rate of capitalization (4 x 0.50). The total APR return for this example would be ten percent.
My hope is to repay these notes sooner than the full term of eighteen months. In that case, a pre-payment penalty will apply in the amount of one-third of the remaining interest. I will continue using the example of the $125,000 note at ten percent APR. If the full amount of the funds were utilized for the entire eighteen months, the interest payable at the end of that term would be $20,139.04. If that note were repaid after six months, the interest payable would be $6,381.66 for the six months the funds were actually utilized, plus one-third of the interest amount for the remaining twelve months (0.3333 * $13,757.38, or $4,585.79), bringing the total interest payable at the end of six months to $10,967.45.
In order to ensure repayment of the notes in the event of my untimely demise, I will take out a term life insurance policy and make legal arrangements sufficient to cover the principal and interest payable to all note holders.
Serious interested parties please respond by PM. Thank you.
:eek: