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Promissory Notes
Short-term Commercial Promissory Notes
A promissory note is a form of debt similar to a
loan. It specifically promises to pay and spells out the
terms rather than an IOU
which only acknowledges that a debt exists. Companies
issue the notes to finance their business. In return
they agree to pay a fixed rate over a period of time.
Legitimate promissory notes are not risk-free. The
company may run into problems and not be able to make
interest or principal payments.
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