Description: A down payment loan is a loan which allows you to finance funds that need to be put down, up front, on a mortgage, so that you can stay more liquid.
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Most mortgages and other types of large loans require that you make a down payment, towards the initial principal balance, usually consisting of some percentage of the total amount of the loan, but it usually doesn't make sense to do that. For example, would you lend someone $100 only if they give you a $10 bill first, so you can feel more confident they'll pay you back the $90 they owe? No.
To qualify for a $200,000 mortgage, for example, you may be required to put a "down payment" of $20,000 on the mortgage, just to qualify for a particular rate. Usually, the more you put down - up front - the better the rate you'll receive. But, for some, tying up that much cash would be a burden, or might just not make sense. You might need that money to invest in your business, or another venture, which could make more of a return for you than just parking it as "equity", which is to say, paid down princip
Just as you might not like to tie up your available cash if you're an individual consumer, you definitely don't want to tie up your liquid assets if you're a business entity. You can often get a down payment loan -after- having received your primary loan, and if you think about it, it's just borrowing money to access capital, so, it doesn't really matter whether you finance your downpayment beforehand or after the fact. Though, your credit may be in better shape *before* you take out the primary loan and yo