What are some alternative loan repayment methods that could be considered instead of an interest-only period or balloon payments?

A real-world example of a company that successfully used an interest-only period or balloon payments to expand their business is Hertz. In the early 2000s, Hertz decided to aggressively expand into the consumer travel market. To finance this venture, they obtained a substantial loan that included an interest-only period and balloon payments. This financial strategy allowed Hertz to manage their cash flow effectively during the expansion period, ensuring their venture was a success.

Global companies like Apple or Google can utilize concepts such as an interest-only period and balloon payments in their financial strategies in several ways. Firstly, an interest-only period allows these companies to borrow large sums of money for expansion or other strategic initiatives without the immediate burden of repaying the principal. This can free up cash flow for other uses. Secondly, balloon payments can be useful for these companies as they may have significant cash reserves to make large payments at the end of the loan term. However, these strategies come with risks and must be managed carefully to avoid financial instability.