What this form is for
This form is used when a business borrows money and needs to create a legally binding promise to repay the lender according to specific terms. Banks, alternative lenders, and private investors require this document to formalize the loan amount, interest rate, payment schedule, and consequences if you default.
Before you start
- The exact loan amount (principal) and the date funds will be disbursed
- Your company's full legal name, business address, and employer identification number (EIN)
- The lender's complete legal name and address
- The interest rate you've agreed to, whether it's fixed or variable, and how it will be calculated (simple or compounded, and if compounded, how often)
- Your payment schedule details: amount of each payment, frequency (monthly, quarterly, etc.), due date of first payment, and final maturity date
- Any collateral pledged to secure the loan and its estimated value
- Late fee structure and grace period terms you've negotiated
Step-by-step
1. Fill in the creation date of the note and the principal amount being borrowed in both numerals and written words to prevent disputes.
2. Enter the complete borrower information including your business legal name exactly as registered with Florida and your principal place of business address.
3. Record the lender's full legal name and address where payments and notices should be sent.
4. Specify the annual interest rate as a percentage. In Florida, verify your rate complies with usury limits if applicable to your loan type. Indicate whether interest is simple or compounded and the compounding frequency.
5. Detail your payment terms: payment amount, due date each period, number of payments, and the final maturity date when any remaining balance is due in full.
6. Describe any collateral securing the note with sufficient detail for identification, including location if it's equipment or real property in Florida.
7. Complete the default and acceleration clause section, noting the grace period before default (commonly 10-15 days) and whether the lender can demand full immediate repayment upon default.
8. Fill in late fee terms, typically expressed as a percentage of the overdue payment or a flat dollar amount, ensuring compliance with Florida law.
9. Add any prepayment terms specifying whether you can pay off the loan early without penalty.
10. Sign and date in the presence of a notary if required by your lender, and ensure any co-signers or guarantors also execute the document.
What lenders look for
- Banks scrutinize whether the interest rate, payment amount, and term align with your cash flow projections and debt service coverage ratio, so ensure the numbers demonstrate you can comfortably meet obligations.
- Missing or inconsistent information between this note and your loan application materials raises red flags; double-check that principal amount, term, and collateral descriptions match exactly across all submitted documents.
- Florida lenders expect clear default remedies and may reject notes with ambiguous acceleration clauses or missing late-fee provisions, which weaken their legal position if collection becomes necessary.