Any type of loans (or other types of debt) can be structured in almost infinite number of ways. The one you described will, on one hand, reduce the lender’s exposure to the borrower by eliminating interest deferment during the first four years, and on the other hand, commit the lender to full four years without additional approval as long as the loan remains current. If the borrower fails to make interest payments during the first four years, I’d presume it will trigger an event of default, causing all remaining payments, including principal, to be immediately due and payable. It seems to make sense only for borrowers who need loan commitment for full four years or if this type of loans carries lower interest rate.