A cash flow note is a type of legally binding contract that promises one person will receive a set amount of money from another person. A backup source of income guarantees cash flow notes are paid.
4 types of cash flow notes
1) Real estate or mortgage
2) Structured settlement
3) Business
4) Lottery rewards
Cash flow note details
1) Real estate or mortgage
Actual owned personal property such as buildings, land, and vehicles guarantee real estate or mortgage cash flow notes. If the contract is unable to be fulfilled the property may be sold to pay the remaining balance.
2) Structured settlement
Funds acquired from a legal settlement guarantee a structured settlement cash flow note. In the case of payment default, the funds from a settlement may pay the remaining balance.
3) Business
Assets owned by a company guarantee a business cash flow note. Business assets may include both property and settlements to pay off the remaining debt in case of default.
4) Lottery rewards
Lottery rewards is a cash flow note typically purchased by an investment company. If a lottery winner does not wish to receive multiple payments, the person may sell their future earnings for a one-time payment.
Copyright © 2016 John Mallozzi
