What is interest roll-up in relation to a business loan?

Interest roll-up is when a lender agrees that the repayment of capital and interest can be deferred for a period, possibly until the end of the loan term. In this period, you won't make any repayments at all. Interest will continue to be added to the loan monthly, weekly or possibly daily.

In this situation you should make sure you understand the impact of compound interest, namely you will be paying interest on the interest each time a new interest amount is added. Compound interest can become very expensive, so make sue you fully understand the terms and cost of any agreement that you enter into.

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