In a straight note, how is the principal usually paid?

In a straight note, the principal is typically paid in full at the end of the loan term, which is why the correct answer is that it is paid at the end of the loan term. This type of loan structure allows the borrower to only pay interest during the term of the loan, which can make monthly cash flow more manageable, especially for projects that may not provide immediate income.

At maturity, the borrower must pay the entire principal amount. This is different from other financing structures where the principal may be paid down in installments, monthly or quarterly, throughout the life of the loan. In a straight note, however, the lender is fully relying on the borrower to repay the full principal amount all at once when the loan matures. This structure can be advantageous for borrowers who want to minimize their payment obligations while the loan is active.