Loan Note


Loan Note
An extended form of an IOU from one party to another that enables a payee to receive payments (possibly with interest) over a set period of time, ending with the date at which the entire loan is to be repaid.

Loan notes are usually provided in lieu of cash at the payee's request.

A loan note can help an individual investor avoid an undue tax hit resulting from a lump sum payment from a settlement or cash-out package from a company. In these cases, the individual is given a choice between cash or a loan note.

When loan notes are used between businesses, the purchaser is able to act as a borrower and make payments over time, often at a minimal or "at cost" interest rate.


Investment dictionary. . 2012.

Look at other dictionaries:

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  • Construction Loan Note - CLN — A short term obligation in the form of a note, used for the funding of construction projects such as housing developments. In most cases, the note issuers will repay the note obligation by issuing a longer term bond and using the proceeds from… …   Investment dictionary

  • Note — Debt instruments with initial maturities greater than one year and less than 10 years. The New York Times Financial Glossary * * * ▪ I. note note 1 [nəʊt ǁ noʊt] noun 1. [countable] BANKING a piece of printed paper that is used as money; …   Financial and business terms

  • note — debt instruments with initial maturities ( maturity) longer than one year and shorter than 10 years. Bloomberg Financial Dictionary * * * ▪ I. note note 1 [nəʊt ǁ noʊt] noun 1. [countable] BANKING a piece of printed paper that is …   Financial and business terms

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  • note purchase agreement — USA A contract for the sale and purchase of notes that allows a company (the seller) to raise money for general corporate purposes, to complete an acquisition or for other purposes. The purchaser invests in the company through the purchase of the …   Law dictionary


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