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Training Guide

Principal Repayments


Training Guide

Principal Repayments

Commercial Lending
Remote or in person

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.

Prepare Yourself

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

  • still frame from Scheduled Repayments


    Principal Repayments

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

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    Principal Repayments


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.

About Hotshot

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