Trump's scramble to pay off legal costs could set off existing loan defaults: analyst

Adding to Donald Trump's cash crunch woes as he scrambles to find cash to cover the half billion dollars he owes in civil damages is the specter of throwing his existing loans into default.

In an analysis into the multiple paths the former president could take to pay what he owes, the Atlantic's David Graham claimed Trump is hemmed in by a myriad of financial complications — with the clock ticking and interest piling up.

He's also facing the potential for asset forfeiture or a fire sale of his business empire if he can't find the money.

Trump owes $454 million — and interest that's being added every day — after he was found liable of fraud by inflating his property values to secure favorable loans and interest. He has to pay that before he can even start to appeal the ruling.

He owes another $83.3 million after being found liable of defaming writer E. Jean Carroll, and an extra $5 million from an earlier trial brought by her.

Graham added that Trump's real estate may be heavily encumbered by existing loans, which would lessen the amount of equity he has to secure the hundreds of millions he needs to pay.

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In his Atlantic column, he wrote that court filings describe loans from Deutsche Bank that force him to keep a substantial amount of cash on hand, as well as setting a floor for his net worth that would be heavily impacted by his taking on an extraordinary amount of new debt.

According to the analyst, "Evidence from the trial revealed that one loan from Deutsche Bank required him to 'maintain $50 million in unencumbered liquidity and a minimum net worth of $2.5 billion.'"

Graham added, "Bonding companies might hesitate to work with Trump for various reasons. The size of the bond required is substantial. Trump also has a reputation for stiffing vendors, and recouping any amount might only get more challenging if Trump is reelected president and tries to use his office to put off collection, as he previously tried to use it to delay or avoid litigation."