Promissory Note

$ ______________ (Face Value or Principal Note)

______________ (Date)

For value received, the undersigned _____________________________________

(Borrower), _________________________________________ (Address), promises to
pay to the order of ____________________________________("Lender"), the sum of $
_____________, with interest on unpaid principal of 1.5% per month or 18% per year,
upon the demand of the Lender (Due Date), at _______________________________
or other place designated by the Lender.
Unpaid principal after the Due Date, occurring after the demand of the Lender as stated
above and as of that date, shall accrue interest at a rate of 2% per month or 24%
annually, or the highest amount allowed by law, until paid.
Until the Note is called, the unpaid principal and accrued interest shall be payable in
monthly installments of $ __________, and continuing until ______________ (Date), at
which time the remaining unpaid principal, interest, and other costs shall be due in full
unless this Note was called earlier per the above rights of the Lender to call the Note at
any time.
Any payments on this Note shall first be applied against legal or collection costs until
paid in full, as then may be due, and then against outstanding interest until paid in full,
as then may be due, and finally applied to the outstanding principal balance.
1. Prepayment. The Borrower reserves the right to prepay this Note (in whole or in part)
prior to the Due Date with no prepayment penalty.
2. Collection Costs, Attorneys Fees, and Late Charge. If any payment obligation under
this Note is not paid when due, the Borrower promises to pay all costs of collection,
including reasonable attorney fees, whether or not a lawsuit is commenced as part of
the collection process, without protest of any kind, legal or otherwise. If the note
remains unpaid for an additional 30 days after Lender gives demand, the Borrower
shall be required to pay a 5% late charge based on the principal still remaining due
on the Note at that time.
3. Default Events. If any of the following events of default occur, this Note and any
other obligations of the Borrower to the Lender, shall become due immediately,
without demand or notice:
1) failure of the Borrower to pay the principal and any accrued interest in full on or
before the Due Date;
2) death of the Borrower or Lender;
3) filing of bankruptcy proceedings involving the Borrower as a Debtor;
4) application for the appointment of a receiver for the Borrower;

5) making of a general assignment for the benefit of the Borrower's creditors;

6) insolvency of the Borrower;
7) a misrepresentation by the Borrower to the Lender for the purpose of obtaining or
extending credit.
4. Borrower Waivers. Borrower waives presentment for payment, protest, and notice of
protest and nonpayment of this Note.
5. Additional Lender Rights. No renewal or extension of this Note, delay in enforcing
any right of the Lender under this Note, or assignment by Lender of this Note shall
affect the liability or the obligations of the Borrower. All rights of the Lender under
this Note are cumulative and may be exercised concurrently or consecutively at the
Lender's option.
6. Notices.
Any notice required by this Agreement or given in connection with it, shall be in writing
and shall be given to the appropriate party by personal delivery or a recognized over
night delivery service such as FedEx.
If to the Borrower: ______________________________________________________.
If to the Lender: ________________________________________________________.
7. No Waiver.
The waiver or failure of either party to exercise in any respect any right provided in this
agreement shall not be deemed a waiver of any other right or remedy to which the party
may be entitled.
8. Entirety of Agreement.
The terms and conditions set forth herein constitute the entire agreement between the
parties and supersede any communications or previous agreements with respect to the
subject matter of this Agreement. There are no written or oral understandings directly or
indirectly related to this Agreement that are not set forth herein. No change can be
made to this Agreement other than in writing and signed by both parties.
9. Governing Law.
This Agreement shall be construed and enforced according to the laws of the State of
____________________ and any dispute under this Agreement must be brought in this
venue and no other.
10. Headings in this Agreement
The headings in this Agreement are for convenience only, confirm no rights or

obligations in either party, and do not alter any terms of this Agreement.
11. Severability.
If any term of this Agreement is held by a court of competent jurisdiction to be invalid or
unenforceable, then this Agreement, including all of the remaining terms, will remain in
full force and effect as if such invalid or unenforceable term had never been included.
In Witness whereof, the parties have executed this Agreement as of the date first written
above.
_________________________
Borrower

_______________________
Lender

Promissory Note, Demand

Review List
This review list is provided to inform you about the document in question and assist you
in its preparation. The tough language involved in this document is required to improve
your chances of collecting on a defaulted note. As a rule, these kinds of notes are
subject to collection problems with the borrower. The lender can forebear if he or so
chooses. However, strict terms are required to improve the odds of ultimate collection.
We recommend a Balloon Note or this Note, instead of a simple Demand note, because
both have a predictable end point for all parties. Whether you elect to use a Balloon,
Demand, or simple Promissory Note, one of these types of Notes should be used, in our
opinion, if a friend or family member requests a loan. The best result can be for the
prospective borrower to decide they do not want to undertake the risks of such a loan.
Good; you are off the hook.
If you are the borrower desiring a loan from a family member or friend, this is a good
document to use if you mean it. If that person shows the document to a financial advisor
or attorney, they will report that you are serious about repayment and have provided
the appropriate protections. This, in fact, is exactly what happened to me in my first
company, the Umbroller stroller company, when my partner and I both used family loans.
Both were repaid in full and complete satisfaction to the parties, in part, because the
terms of the loan were binding upon our Corporation and thereby influenced our financial
backers to repay the loans as due. On a personal basis, because we put tough terms on
ourselves, our families didnt feel like irresponsible fools for giving us the money!
This is a simple straightforward document that only requires the signatures of the party.
If you are concerned about any later dispute, and being on the safe side is always
prudent, we recommend you obtain a notary verification and signature as well.
There should be only one original of this document; multiples imply multiple obligations
by the borrower. The lender should keep the original in a home safe or safety deposit
box. Copies can be kept as desired, by the parties.