A loan agreement is a fairly standard type of document which sets out the terms of a loan and its repayment. It should be used whenever a substantial amount of money is involved, particularly if the lender and borrower are not very closely linked or wish to keep things on a more formal footing. This agreemenet should be used by all types of small business, including companies, partnerships and LLPs, Scottish general partnership and Scottish limited partnerships SLPs , and sole traders. Some of the principal terms contained in a loan agreement include the amount of the loan, the date by which it needs to be repaid in full along with any agreed instalment dates, and details of any interest payable. It is also possible to add security to a loan - in which case the borrower pledges their assets such as a house or car as collateral for the loan.
20+ Sample Promissory Note Templates
How to Write a Promissory Note [with Free Template]
Last Updated: March 31, References. This article was co-authored by our trained team of editors and researchers who validated it for accuracy and comprehensiveness. There are 17 references cited in this article, which can be found at the bottom of the page. This article has been viewed 58, times.
How to Write a Promissory Note
A promissory note is a financial instrument that contains a written promise by one party the note's issuer or maker to pay another party the note's payee a definite sum of money, either on demand or at a specified future date. A promissory note typically contains all the terms pertaining to the indebtedness, such as the principal amount, interest rate, maturity date, date and place of issuance, and issuer's signature. Although financial institutions may issue them see below , promissory notes are debt instruments that allow companies and individuals to get financing from a source other than a bank. This source can be an individual or a company willing to carry the note and provide the financing under the agreed-upon terms.
Last Updated: May 6, References Approved. This article was co-authored by Michael R. Michael R. Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. There are 9 references cited in this article, which can be found at the bottom of the page.