Glossary

Interest roll-up

Interest roll-up adds interest to the balance instead of collecting it periodically, deferring the whole interest cost to the end of the facility.

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DeferredNot paid periodically

Added to balancePaid at exit

Definition

Interest roll-up is the mechanism behind rolled-up interest: rather than servicing interest each period, it is capitalised onto the balance and settled at the end. It eases cash flow during the term but grows the debt and the final bill.

In plain terms

You pay nothing along the way, so the debt swells and the exit payment is larger. Useful for projects with no income until completion.

Why it matters for your company

Only roll up interest where a clear exit clears the larger balance. See rolled-up interest and bridging loan interest.

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