Hi everyone,
I have a dilemma as to where to best utilize the excess cash in our business:
Last month we replaced a business asset on which we put 25% down ($52,432.16) and now have a 48 month loan for $151,000 at 5.8% on the remainder.
This month we sold the original asset for $85,000 cash.
We can not pay out the entire loan without penalty (think greater of 3 mos interest or IRD - just like a Canadian mortgage), however we can make a large pre-payment.
My question to you is:
Would you recommend putting the $85K (or more) against this loan to offset the $18,474.13 we will pay in interest, or invest it into an index-based investment like Tangerine's Streetwise funds (MER 1.07%)?
Thank you in advance,
AK