Bullet payment
Solar finance glossary · South Africa
Quick definition
A bullet payment is a single lump-sum repayment of the entire principal of a loan at the end of its term, with the borrower paying only interest (or nothing) during the term rather than amortising the debt in instalments.
In solar finance a bullet structure is uncommon for a standard instalment sale but appears in bridging and construction facilities, where an EPC or developer borrows to build a plant and repays the whole amount when the long-term finance or the customer's payment lands. It also appears in project finance at the sponsor level, where a shareholder loan is repaid from a refinancing or a sale.
The distinction from a balloon payment is one of degree: a balloon repays part of the principal at the end after reduced instalments, while a bullet repays all of it. Because the lender carries full exposure until the final date, bullet facilities usually require strong security, a clearly identified source of repayment and a shorter term.
ArkFlow is a software platform that facilitates modelling different repayment profiles, including bullet and balloon structures, within a solar financial proposal.
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Solar Asset Finance Explained: Own Your System From Day One →Solar asset finance, also called an instalment sale, equipment finance or a solar loan, lets you own your system from day one and pay it off over 3 to 7 years.
ArkFlow is a software platform that facilitates solar finance origination. It is not a bank, lender, credit provider, tax adviser or financial adviser. This definition is general information, not a credit offer or advice. Funders make their own credit decisions and tax treatment should be confirmed with a registered practitioner.