Download these 43 Free Promissory Note Samples & Templates in MS Word and PDF Format to study and prepare your own Promissory Note comprehensively.
As the name ‘Promissory Note’ suggests, it is a writing that shows a promise to fulfill an obligation. Promissory Notes are written agreement that specifies how borrowed loans are to be paid, where it will be paid and the when you are expected to pay the said loan. A Promissory Note ideally and clearly contains all the terms and rules how to pertain indebtedness to the note’s payee by the issuer of the Promissory Note. It is based on amount, interest rate, maturity date, date and place of issuance, and signatures of issuer. It also describes the possible and necessary steps to be taken in case the borrower(s) violate the terms or fail to repay the loan as agreed.
Why Promissory Notes?
Borrowing from family and friends to finance a business is one easy way that start-ups have been raising capitals to start their businesses over time. It is considered the fastest and easiest source of money available to young entrepreneurs and has been said to account for over 50% of all start-up businesses globally.
Though banks produce their own Promissory Notes, if you intend to approach an individual for this by yourself, you may need to develop your own by yourself or create one together with the person giving you the loan. Promissory Notes are very important where loan agreement happens between individual because it is easy to have misunderstandings without a concrete agreement. On several occasions, the borrower may assume the money is a gift due to his closeness with the lender.
On other situations, one party may decide to take the other for granted. Even more, it is possible that one party deliberately plays on the innocence of the other because of the flexibility through which the contract was undertaken. Ultimately, a Promissory Note closes the gaps to a possible mix-up of facts and gives the agreement a strong formal outlook.
According to Danny Freeman, principal adviser with Darda Financial Services in Winston-Salem, North Carolina, “A Promissory Note means that by nature you have the money to make payments on the loans”. Furthermore, he warned that if your cash flow is uneven, you should check for other alternatives like equity agreement.
Promissory Note Templates – MS Word (Docs)
Here is preview of a Free Promissory Note Template in MS Word Format.
Download link for this Promissory Note Template.
Checkout this wonderful Promissory Note Sample that can easily be filled to print your very own promissory note quickly. Pay full attention to the contents and details of the transaction mentioned in this document. Remember, each and every word matters.
Another thorough Promissory Note Sample which contains Confession of Judgement provision which constitutes a waiver of important rights.
Checkout this Promissory Note Template as a MS Word file that even an average PC user can fill-up to come up with a comprehensive legal promissory note.
If you are on rush and looking for simplest possible note, then here is one with minimal words to care about.
Another good looking Promissory Note where the focus is on key information related to Borrower and the Lender. As this note lack in details of Terms & Conditions, you can attach another paper with your specific terms of reference if you feel suitable.
This one is Trade Promissory Note Template that can easily record your transaction with minimal efforts and still a commercial viability.
In case you need a Secured Promissory Note Form, here is one such to assist you quickly.
Writing a Professional Promissory Note
First, it is important to treat personal loans as a formal business transaction. This will enable you to give it the attention it demands. It is advisable to sit down with the other parties and agree on the details of the contract which will spell out the conditions in the Promissory Note.
The names of the two parties involved should be written on the agreement clearly stating who the borrower and the lender are. The date the loan is being taken and the amount should be included. The repayment plan, the period of repayment and the interest charged should be included. Sometimes, collateral is involved. The Promissory Note should clearly state what the collateral is and the point at which it is due for return.
Any other agreements reached should be clearly stated on the Promissory Note. When the amount involved in the contract is substantial enough, there may be a need to involve a lawyer. This will help to have a legal perspective and inputs on the agreement.
Promissory Note Templates – (PDFs)
Here is preview of a Free Promissory Note Template created as PDF Form.
Download link for this Promissory Note Form.
Promissory Note Investment Plan:
Lets see as if how we can use Promissory Notes for an Investment that can yield good profit at the end.I assume that some of your funds are held in Self-Directed IRA Account. I also assume that you wish to invest in Promissory Notes guaranteed by Real Estate Property in your near by areas. Typically such property should be within 100 to 120 Km from your location otherwise it will be considered as an investment risk.
Lets review the investment proposal and possible outcomes to guide your decision.
- Actual Amount You are Planning to Invest (be specific)
- How much money do you feel comfortable to spend on each note? 20%, 40%, 60%, 80%.
- Expected Period of the time for your financial investment? 6 months, 12 months, 24 months, 60 months, 120 months.
- The way, you will be discovering appropriate promissory notes? Promissory note specialist, market, network, Bing, private contacts.
- Exactly how will I go about identifying the standard of the note? Promissory note expert, lawyer, CPA, monetary adviser.
- Exactly how will I get about determining, if we would like to be a minority investor-10%, 40%, etc. – in a particular note?
- Character references for the other minority people when you look at the note, credit references and credit histories of the other minority note investors talk to a promissory note specialist.
- That is likely to be accountable for maintaining the note? Which is likely to collect the monthly payments, verifying that hazard insurance is in place, verifying that the residential property fees are paid, deliver completely year-end income taxation reports towards the minority buyers and also to the borrower?
Do you wish to hire a professional promissory note servicing company, one of many other minority buyers.This can help you in situation if problems arise associated with debtor or among the minority note people? Resolution can be by vote, according to percentage of ownership, by vote based on one vote per each investor, by a prior written agreement signed by the specific people, by conversation, as issues arise, on a case-by-case basis
Plan as how will you take decisions if additional cash is necessary to spend money for appropriate fees, accounting charges, or to spend for outstanding residential property taxes and hazard insurance coverage? By vote, based on portion of ownership, by a prior written arrangement signed by the individual investors, by discussion, as problems occur, on a case-by-case basis
In a Nutshell:
To be able to be successful at everything, great preparation is essential. Tailor the plan to your individual capabilities, needs and objectives. Don’t you need to “reinvent the wheel” yourself whenever it has currently already been devised and mastered. Gain benefit from the mistakes that other individuals have already made, and that they’ve learned from. There isn’t any reason behind one to re-make expensive blunders that have actually already been made many times by other individuals. You can easily and really should have an expert help you avoid typical blunders. Engage an honest, seasoned promissory note specialist to help make the key decisions.