This Basic Loan Note is a simple form of legally binding financing arrangement whereby the borrower issues a document (the loan note) to a noteholder, or noteholders, evidencing that money has been borrowed. The terms and conditions on which the money has been borrowed are succinct and minimal; however the key repayment and interest provisions are included. It can act as an alternative to a promissory note. Note that as a loan note is a deed poll, it is only required to be executed by the company issuing the note.
The execution provisions of this template are compliant and consistent with the requirements of the Land Registry for prescribed form deeds introduced from 20th September 2019.
Loan Notes can offer an attractive form of raising finance for SME businesses and clubs or associations, because:
• Several loan notes of small denominations can be issued;
• Money can be raised on a short term basis; and
• It enables clubs, societies or associations with large membership bases, with members willing to invest small amounts each, to raise finance.
This Loan Note is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes. Should you require a loan note with more detailed provisions, then you are advised to download the long form version of the loan note.
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