{"id":749,"date":"2020-12-22T22:56:14","date_gmt":"2020-12-22T12:56:14","guid":{"rendered":"http:\/\/nz.legalvision.com.au\/?p=749"},"modified":"2021-03-19T08:46:52","modified_gmt":"2021-03-18T19:46:52","slug":"promissory-note","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/commercial-contracts\/promissory-note\/","title":{"rendered":"What Is a Promissory Note in New Zealand?"},"content":{"rendered":"\n

If you are starting up your own business or enterprise, there may come the point when you have to take out a loan to fund your commercial activities. This is a standard part of the start-up process<\/span>. Therefore, it is important to know the various forms and documents you can use to pay back that loan and to outline the exact parameters of how you plan to do so. One such document you can use is a promissory note. T<\/span>his is a written promise that specifies how much you have to pay back and how that is going to happen. This article will explain what a promissory note is and how it works, as well as when you would use o<\/span>ne.<\/span><\/p>\n\n\n\n

What Is a Promissory Note?<\/span><\/h2>\n\n\n\n

Under New Zealand law, a promissory note is an unconditional promise you draft, promising to pay back a certain sum of money to another person. It is legally binding. This can be paid either on demand by who is lending you the money or by a specified date. As the person who draws up the note, and the one who is borrowing the money, you have to sign i<\/span>t.<\/span><\/p>\n\n\n\n

However, the lender typically does not have to sign it as well. Sometimes a promissory note is called an \u201cIOU\u201d, but it is a bit more formal than that. The note usually outlines how you plan to pay the lender back on top of the specified sum that you have to pay back. You can register i<\/span>t as security collateral in your financing statement on the Personal Property Securities Register as well.<\/span><\/p>\n\n\n\n

A promissory note would typically include:<\/span><\/p>\n\n\n\n