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Is the amount of the monthly payment linked in any way to their profitability and/or their cash flows, in the contract? If so, it's just a matter of reminding the buyer of the contract's provisions, maybe along with some calculations supporting your case for a higher payment.
But that's probably not the case, and the contract most likely calls for some fixed monthly payment. Any increase in the monthly amount must therefore be a mutually-agreed upon change to the contract, and you'll probably need to offer up some quid pro quo economic incentive to get the other party to play along. This incentive could, e.g. take the form of a reduced interest rate, but with the lower rate applying ONLY if they make the agreed-upon higher payments. (A reduced interest rate, without making the higher monthly payments mandatory, is actually a disincentive for them to increase the payment. They would prefer to direct as much of their cash flow as possible toward the paydown of higher-rate debt, and if you reduce the rate on your paper, it increases the odds that the buyer has other debt(s) bearing a higher rate than yours.) A more extreme restructuring would be giving them a reduction in the outstanding principal in exchange for a higher monthly payment. But with this one (well, actually, with any significant change to the terms) you should run it by your tax advisor first. Under US tax law, making changes to tax-favored installment contracts can sometimes have unexpected tax results, if the change is significant enough for the transaction to be deemed an exchange of the original contract for a new one.) You'll probably have to exercise a little creativity to think of some incentive(s) to induce your buyer to jack up the payments. Since you have the best view of the actual situation, you may think of several. Good luck! |
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