A promissory note, also referred to as a note payable in accounting, is a contract detailing the terms of a promise by one party to repay a sum of money to the other. The obligation may stem from the repayment of a loan or from another form of debt. In the sale of a business, for example, the purchase price might be a combination of a cash payment and one or more promissory notes for the balance.
The terms of a note typically include the principal amount, the interest rate if any, and the maturity date. It may contain provisions concerning the payee’s rights in the event of a default such as foreclosure of the maker’s interest. For loans between private parties, writing and signing a promissory note is often considered wise for a variety of reasons, including securing repayment.Find Secured Promissory Notes, and other types of promissory notes by clicking here.