A stepped payment is a loan arrangement that allows for monthly repayments to start low and increase gradually over time.
For example, a new franchise owner negotiates a stepped payment structure on a $150,000 equipment loan, starting at $1,500 per month for the first year while the business ramps up, then stepping up to $2,800 per month in year 2 and $3,200 per month from year 3 onward as revenue grows.
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