After deducting debt service payments, cash sweep refers to the utilization of any free cash flow to pay down an outstanding loan balance as opposed to distributing it to shareholders. In relation to real estate, cash sweep is typically carried out by a lender when a borrower is unable to pay off the balloon balance upon maturity.
Cash Sweep
After deducting debt service payments, cash sweep refers to the utilization of any free cash flow to pay down an outstanding loan balance as opposed to distributing it to shareholders. In relation to real estate, cash sweep is typically carried out by a lender when a borrower is unable to pay off the balloon balance upon maturity.
