Secured Promissory Note Template

This Secured Promissory Note Agreement (“Agreement”) is entered into between:

1. Parties

(Enter name and address of person or company)

​[Lender.FirstName][Lender.LastName]​

​[Lender.StreetAddress][Lender.State][Lender.City][Lender.PostalCode]​

“Lender”

And;

(Enter name and address of person or company)

​[Borrower.FirstName][Borrower.LastName]​

​[Borrower.StreetAddress][Borrower.State][Borrower.City][Borrower.PostalCode]​

“Borrower”

2. Recital

Whereas in terms of the Agreement, the Lender hereby promises to pay an amount not exceeding (enter the maximum amount of money owed) (“Capital Amount”) together with the interest that may become payable on the Capital Amount from time to time (“Interest”), in accordance with the Agreement and at the rate(s) specified herein.

Therefore in terms of all agreements, acknowledgments, and covenants under the Agreement, the Lender and Borrower agree as follows:

3. Payment Terms

3.1 The Capital Amount will mature on (insert date of maturity).

3.2 From the date of (insert first date of interest), simple Interest shall begin accruing on the Capital Amount at a rate of (insert Interest rate) (“Rate”) and continue accruing on the (insert day – example “30th”) day of each succeeding month on the balance of the Capital Amount still owed until such time that the Capital Amount is repaid in full.

3.3 The Borrower agrees to repay the Capital amount and Interest in monthly installments of (insert amount) on or before the (insert day) day of each month, commencing from (insert date of first installment) until such time that the Capital Amount and Interest are repaid in full.

4. Acceleration

If the Borrower fails to make any payment in terms of this agreement when such payment falls due, the Lender retains the right to declare all payments under the Agreement immediately due and payable.

(“Acceleration”).

5. Advance Payment

The Borrower retains the right to make full repayment of the Capital Amount and any Interest owed at any time before such amounts fall due with no penalties being levied.

6. Security and Default

6.1 The Borrower’s promise to pay will be secured by a Security Agreement against the Borrower’s property described as (insert details of property) (“the Property”).

6.2 In the event of Acceleration being applied, the Property shall be transferred to the Lender, who shall thereafter retain full rights to ownership and possession of the Property.

6.3 Term 6.2 above notwithstanding, the Lender shall not be allowed to transfer, sell or otherwise alienate the Property without the Borrower’s written consent until such time that the Borrower is provided with a maximum of seven (7) days to cure any defaults.

6.4 Should the Borrower not cure a repayment obligation in time, the Lender reserves the right to sell, transfer, or alienate the Property as full repayment for any amounts still owed.

6.5 Should the value of the Property be insufficient to satisfy the full amount of the Capital Amount and any Interest still owed to the Lender, the Borrower will remain liable for the balance, which shall continue to accrue interest on a monthly basis at the maximum rate permitted by any applicable law.

7. Collection Fees

The Borrower agrees to pay any fees and disbursements, including attorneys or debt collection agents fees (“Collection Fees”), reasonably incurred by the Lender to enforce repayment.

8. Allocation of Repayments

Any payments made by the Borrower to cure a default under the Agreement shall first be apportioned to Collection Fees, then Interest, and then to the Capital Amount.

9. Maximum Interest Allowable

The Interest Rate under the Agreement will not exceed the maximum rate of interest allowable in terms of any applicable law.

10. Governing Law

Notwithstanding any federal law that may apply, the parties agree that the Agreement shall be governed under the laws of the State of (insert state).

11. Notice

Any necessary notices required in terms of any applicable law will be provided in writing and delivered in person or by certified mail and delivered to the addresses listed by each party in term one (1) of the Agreement.

12. Waiver of Presentments

The borrower waives presentment, notice of delinquency, and notice of protest to the extent permitted under any applicable law governing the agreement.