What this form is for
A Promissory Note is used when your business borrows money and needs to document the legal obligation to repay. Both traditional banks and private lenders require this binding contract that specifies the principal amount, interest rate, payment schedule, maturity date, and what happens if you default.
Before you start
- Loan amount (principal) and the exact interest rate agreed with your lender
- Payment schedule details: amount per payment, frequency (monthly, quarterly), and total number of payments
- Maturity date when the full balance must be repaid
- Collateral description if the note is secured (property address, equipment list, or other assets)
- Business legal name, EIN, principal address, and borrower's personal information if you're signing as a guarantor
Step-by-step
1. Fill in the date of the agreement and the principal loan amount in both numerals and written words to prevent disputes.
2. Enter the borrower information including your business legal name, type of entity (LLC, Corporation, Sole Proprietorship), and principal place of business.
3. Identify the lender with complete legal name and address.
4. Specify the interest rate as an annual percentage and clarify whether it is fixed or variable. Florida does not cap commercial loan interest rates, but consumer loans over 18% may trigger usury review, so confirm your loan type.
5. Detail the payment terms: amount of each installment, due date of first payment, payment frequency, and where payments should be sent.
6. State the maturity date when all outstanding principal and interest must be fully repaid.
7. If the note is secured, describe the collateral in detail and reference any separate security agreement. For unsecured notes, mark that section as "Not Applicable."
8. Complete the late fees and default section, including grace periods, penalty percentages (check that they comply with Florida law), and lender remedies like acceleration of the full balance.
9. Include prepayment terms, stating whether you can pay early without penalty—important for refinancing flexibility.
10. Sign and date in the presence of a notary if required by your lender. Print names and titles of all signers.
What lenders look for
- Banks verify that payment amounts match the amortization schedule for the stated principal, rate, and term. Double-check your math or use a loan calculator before submission—mismatched numbers raise red flags.
- Underwriters scrutinize default and collateral clauses. Vague asset descriptions or missing cross-default provisions (tying this note to other debts) can stall approval or trigger requests for legal revision.
- Personal guarantees are standard for small-business loans. If you sign individually, understand you're personally liable even if the business fails, and this will appear on your personal credit report.