Commercial loan tied to 1-year T bill?
I met with a commercial lender today. He could offer a 20 year note, 5.75%, and after 5 years instead of a balloon payment the loan would revert to the 1-year T bill plus 3%.
This seems unique. I don't know much about the T bill, however as of today that rate would be lower than 5.75%. This also avoids the balloon payment red tape and fees. And, one could always go elsewhere to get another loan.
Thoughts? Good? Bad? Indifferent?