Small Business Promissory Note Template and Its Layout
Companies often borrow money from a bank. Before applying for loan, some requirements and assessments are necessary to implement. This is a difficult situation for small businesses. They often cannot fulfill what the bank wants. As a solution, other sources of capital are available from non-bank institutions. They use the small business promissory note to legalize this loan.
Small Business Promissory Note Concept and Purpose
Before going further, you should know why this note becomes an important part of the business. As similar to a bank, credit institution or private financial services must have a system to legalize the loan. Moreover, this kind of loan is a high risk, especially for small businesses. This is the reason why a bank turns down the application for the loan when business is not sustainable and less profitable.
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Small Business Promissory Note Template and Layout
You can learn small business promissory note easily after exploring layout or outline in this note. The content may be different, but the outline is relatively similar. Check the next list for more explanation.
- Basic information
The first thing on this note is basic information. It tells the person or people that involve in this note. Usually, it has a name, ID, contact info, and address.
- Reason and condition for this note
This part explains why borrowers and lenders do this transaction. Both explain reason and condition related to the way a promissory note is created.
- Interest and payment method
As similar to a bank, the lender has the right to charge a borrower for interest. This part calculates interest and explains the payment method. Moreover, note also includes the date, period, late fee, and anything related to the payment process.
- Conditions and clauses
One note is different from others because of this part of which conditions and clauses. Bank has to follow regulation but non-bank can adapt to the current situation.
- Signature
To legalize note, the signature is mandatory. Both parties put their signature to verify this note. This part is the reason why note becomes a legal document.
Small Business Promissory Note Main Contents
The small business promissory note is a legal document that started that the borrower has the obligation to fulfill payment including the interest. In general, the note is quite similar to a loan contract. However, the outline and contents are relatively flexible. Two notes can have different conditions even though borrowers have the same profiles. The lender changes the condition to ensure the payment is secured with less risk.
Small Business Promissory Note Template Advantages
Small business relies on a template for promissory note due to some advantages. You do not need to spend any money on this template because the file is free. Hiring professionals is definitely out of option because of financial issues. The free template is enough with complete content for preparing this note.
The template is accessible with major software. Users do not have to install a specific application. The templates use the platform, such as Word, pdf, Google docs, and Apple Pages. Few of them also have Excel file type but only for specific layout.
The small business promissory note is editable, so it is easy to adjust and customize. The note must be in the same term between one party and another. The template only provides a guide before creating the fixed content. You can edit the text, clause, condition, and statement to fulfill your needs.
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