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If you are a private lender in Orlando, Florida, Legal Counsel, PA employs a promissory notes lawyer who can assist you with drafting sound and enforceable promissory notes. A promissory note is a legal contract where one party promises to repay another. Private lenders can help individuals launch their small business through small business loans. They can help first-time home buyers purchase their first home, and they can help individuals purchase a car or pay for college tuition. More real estate investors are also turning to private lenders to fund their real estate investment ventures.
If you are a private lender, you might be an investor or a friend or family member considering making a loan. Regardless of your relationship with the borrower, it is important to have a sound promissory note in place. Legal Counsel, PA employs a promissory note lawyer in Orlando, Florida who may be able to assist you with drafting a sound promissory note.
What Should Be Included in A Promissory Note?
A promissory note is a legal instrument. Information contained in the promissory note should include, and is not limited to the following:
This is just some of the information that may be contained in a promissory note. A promissory note may also include consequences of non-payment, though this is not required. In the case of a promissory note made for a home loan, one of the consequences of non-payment might be foreclosure.
If you are a private lender in Orlando, Florida, your promissory note is one of the foundational legal contracts that you’ll want to have on hand before you lend any money. A sound promissory note can protect your rights, clarify the obligations of the borrowing party, and protect your investment. Documenting a loan as such is also important because it can protect you when it comes to your tax obligations and when it comes to disputes between lenders and borrowers. While it might be tempting to use template promissory notes available on the web when lending money, these templates may not always account for local regulations and laws, and they may not always protect you in your particular situation. Before entering into any legal contract, especially when making a private loan, it may be wise to speak to a qualified lawyer, like one employed at Legal Counsel, PA, in Orlando, Florida. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.
How Promissory Notes are Written
There are several important things to consider when writing a promissory note. One of the most important aspects of the promissory note will be the repayment plan. While some smaller promissory notes will just set a maturity date (a date by which the loan must be repaid in full), larger promissory notes might require a repayment plan. According to Inc., there are several types of repayment plans you can choose from. Repayment plans can include amortized payment plans, where the same amount of money is paid each month, with part of the amount covering interest and the other covering the principal until the loan is repaid. Another type of loan is an interest-only loan, where the borrower pays only the interest until the loan matures, at which point the borrower must pay the principal and the remaining interest.
When charging interest, it is also important to consider the amount of interest you are charging. In order for your loan to be considered a legitimate loan by the IRS, you must charge interest at the market rate, or the IRS might consider the loan a gift. Legal Counsel, PA employs a promissory note lawyer in Orlando, Florida who can help you understand your obligations when it comes to setting your interest rates.
Another issue that you may want to consider is collateral. Do you want to lower the risk of the loan by asking for collateral to secure the loan? Yes! Collateral can be business assets if you are making a business loan, or it can be a house, if you are making a home loan, or a car if you are making a loan for a car. Collateral can be any asset the borrower owns and have title to. There may be additional legal forms you must file if your promissory note will be secured with collateral. Legal Counsel, PA employs a promissory note lawyer in Orlando, Florida who can assist you with your promissory note and help you understand your rights and obligations.
Promissory notes can be complex financial instruments. Legal Counsel, PA employs a promissory notes lawyer in Orlando, Florida. Call today to learn more about your obligations and rights under the law. Our firm can create sound and enforceable promissory notes to meet your needs. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.
Promissory Notes: When They Might Be Used?
Promissory notes might be issued in a range of contexts, from small private loans for home repairs, and college tuition, to promissory notes for real estate, business, or vehicles. Real estate investors might turn to private lenders to invest in real estate investments. Some consumers are turning to private lenders to fund their home purchases, car purchases, or other consumer needs. As larger banks become more reluctant to lend money, private lenders have grown. Sometimes when home buyers cannot rely on banks to buy a car or home, consumers may turn to friends and family. Whether you are a private lender looking to invest in a small business through a loan, or are a friend or family member of a loved one looking to lend money to a family member to help them purchase their first house or car, it is important to protect your rights. Having a promissory note in place can protect your interests. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.
Making a Private Loan? Contact Legal Counsel, PA
If you are making a private loan to a friend or family member, don’t let emotions get in the way. Protect your rights with a clearly written promissory note. Legal Counsel, PA employs a promissory note attorney in Orlando, Florida who can help you. Our firm helps investors, private lenders, and individuals who are considering making small private loans. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.