What this form is for
This form creates a legally binding IOU when your business borrows money from a bank, credit union, or private lender. It spells out the principal amount, interest rate, payment schedule, and what happens if you miss payments.
Before you start
- Loan amount (principal) you are requesting or have agreed to borrow
- Annual interest rate and whether it is fixed or variable
- Repayment term (number of months or years) and payment frequency (monthly, quarterly, etc.)
- Maturity date when the final payment is due
- Collateral description if the loan is secured by business assets or personal property
- Your business legal name, EIN, and registered address as they appear on your formation documents
Step-by-step
1. Fill in the date you are signing the note and the city and state where you are signing (this establishes Georgia jurisdiction).
2. Enter the borrower information exactly as it appears on your business formation documents. If you are a sole proprietor, use your personal legal name. For LLCs and corporations, use the registered entity name.
3. Write the lender's full legal name and address. Double-check spelling and any "d/b/a" names if applicable.
4. State the principal loan amount in both numerals and words (example: $50,000 and Fifty Thousand Dollars) to prevent disputes.
5. Specify the annual interest rate as a percentage. In Georgia, there is no usury cap for business loans, but confirm your rate matches your loan agreement.
6. Detail the repayment terms: first payment date, payment amount, frequency, and final maturity date. If there is a balloon payment, state that clearly.
7. Describe any collateral pledged to secure the loan. Reference any separate security agreement by date if applicable.
8. Review the default and acceleration clauses. Georgia law allows lenders to demand full immediate repayment upon default, so understand these triggers (late payment, bankruptcy filing, etc.).
9. Check for prepayment penalty language. Note whether you can pay off the loan early without fees.
10. Sign and date in the presence of a notary if the lender requires notarization. Keep a fully executed copy for your records.
What lenders look for
- Lenders verify that the interest rate and payment schedule match your loan agreement term sheet exactly. Mismatches cause delays or rejections, so cross-reference every number before signing.
- Banks red-flag vague collateral descriptions. Be specific: "2018 Ford F-150 VIN 1FTFW1E50JFA12345" not just "truck."
- Missing or incorrect borrower signature authority is a top mistake. If you are signing for an LLC or corporation, include your title and ensure your operating agreement or bylaws authorize you to bind the company to debt.