Promissory note

A financial instrument consisting of an unconditional promise in writing made by one person to another, signed and dated by the maker, engaging to pay on demand, or at a fixed or determinable future time, a certain sum to another party.

A promissory note will usually list all the terms relating to the debt being created, such as the principal amount, interest rate, maturity date, and place of issuance, in addition to a signature and date.

Promissory notes allow companies and individuals to get financing from a source other than a bank. Put simply, anyone can become a lender by issue of a promissory note.