Loan Note
A loan note is a legal document that outlines the terms of a loan, including the amount borrowed, interest rate, repayment schedule, and any collateral requirements.It serves as a formal agreement between the lender and borrower and is often used in structured finance, private placements, or other complex lending arrangements. Loan notes can be either secured (backed by collateral) or unsecured, depending on the terms.
Example
A startup company issues a loan note to investors, agreeing to repay the loan over five years with a fixed interest rate, using company assets as collateral.
Key points
• A legal document outlining the terms of a loan, including the amount, interest rate, and repayment schedule.
• Can be secured (with collateral) or unsecured.
• Common in structured finance, private placements, and complex lending arrangements.
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