These letters are actually contracts, and they exist to record a borrower's promise (and obligation) to repay a lender a specific amount of money, or to give a certain amount of money to another person.
Business letters, real estate notes, and structured settlement letters are all specific types of cash flow letters. Let's take a look at each of these types, briefly.
Different types of cash flow notes
• Business notes
Business notes are cash notes that a particular business has secured using assets owned by bad business.
There are several different types of business cash flow letters, such as factoring, purchase order funding, or seller carry back notes.
These types of letters usually require that one uses assistance from professional setup, such as financial advisors.
• Real estate notes
Real estate notes are notes that have been secured by actual property, such as a mobile home, car, house, etc. When the collateral or security on real estate notes is actual property, a trust deed or mortgage is needed.
If the borrower defaults on the loan, the lender can take that real property, sell it, and use the proceeds to help relieve the debt.
• Structured settlement notes
Structured settlement notes are given to individuals who have won a settlement from a corporation or individual in compensation for an injury caused by the negligence of the corporation or individual.
With these types of letters, injured parties are generally given annuity payments by life insurance companies over a specific period of time, instead of in one lump sum.
With these types of notes, individuals can sometimes sell part or all of their structured settlement to a private investor in exchange for a lump sum.
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