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Facilitator Guide

Principal Repayments

What’s covered

  • Amortization
  • Voluntary prepayments
  • Mandatory prepayments
  • Reinvestment rights
  • Prepayment process
  • Prepayment penalties

Before the session

Prepare the Attendees

Send the attendees an invitation for the session. Include this link, which has the videos and exercise they’ll need to prepare.

https://www.hotshotlegal.com/discussions/principal-repayments/attendee

Prepare Yourself

Watch the videos and read the exercise so you’re familiar with the Hotshot material.

  • still frame from Principal Repayments

    Course

    Principal Repayments

    An overview of loan repayments, including a discussion of amortization, balloon payments, voluntary vs. mandatory prepayments, and prepayment penalties.

  • Icon of a document

    Exercise

    PDF

During the session

Part 1: Knowledge Check
 
Ask attendees these questions to ensure they understand the topic:
 
  • What are some of the different ways that a loan can amortize? Do all loans have an amortization schedule? 
  • When might a borrower be required to make a prepayment? 
  • Why do borrowers typically like to have reinvestment rights? How do lenders view reinvestment rights? 
  • What’s the difference between a prepayment credited against amortization payments in direct order of maturity and a prepayment credited against amortization payments in inverse order of maturity?
  • What’s a Make-Whole Premium and when might a lender insist on one?
 
Part 2: Group Exercise
 
Lead a group discussion based on the exercise. To encourage collaboration, divide the attendees into groups to discuss the exercise, then have a representative from each group summarize their views to the larger group. Call on people to share their thoughts and ask others to respond.
 
Tip for remote sessions: use your web conferencing system’s breakout room feature to divide people into groups.
 
Part 3: War Stories and Firm Specifics
 
Share your own experiences and guidance, including:
 
  • Anecdotes and war stories (e.g., about a near-disaster or a tough negotiation)
  • General practice tips (dos and don’ts)
  • Firm-specific guidance and practices

After the session

To continue their learning, attendees can check out related courses in Hotshot’s Commercial Lending topic.