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His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.A self-liquidating loan is a form of short- or intermediate-term credit that is repaid with money generated by the assets it is used to purchase.The borrowed money is used to acquire resources that are combined for later sale, and the proceeds from the sale are used to repay the loan.Most short-term unsecured loans are self-liquidating. This kind of loan is recommended for companies with xcellent credit ratings for financing projects that have quick cash flows.However, since you pay more interest than principal in the beginning of your loan, you could have a longer payback period.For example, with a 10-year balloon loan with an amortization schedule, you'll pay about 19 percent of the loan's balance, even though 10 years is 33 percent of the life of a 30-year loan.short-term working capital loan that is repaid from the liquidation of inventories.It is used to finance seasonal borrowing needs of a business needing capital to acquire inventory, by a farmer or other business needing bank financing to buy seed, fertilizer, and other supplies.

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Its popularity waned a bit during the high inflation and interest rates of the early 1980s, but picked back up after interest and inflation rates dropped later in that decade.The borrower repays the loan as inventory is converted into cash or a farm crop is sold.Early in the twentieth century, commercial banks made only short-term loans, and self-liquidating loans were a common variety.Balloon mortgages work like a self-liquidating loan with one key difference: they end before the balance gets paid off, leaving you to refinance.Since the lender is committing to you for less time, you can usually get a lower interest rate with a balloon loan.

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