Secured Promissory Note

When to use Secured Promissory Note

Lending and borrowing money can be a tricky business. If a lending agreement is thoughtfully structured, the arrangement can significantly benefit both the lender and borrower in question. However, if the lending agreement is unreasonably burdensome on either party, such structural issues increase the likelihood that one or both parties will suffer unnecessarily as loan payments become due. Similarly, if enough “wiggle room” is not granted to a potential borrower, that individual may not qualify for a loan at all. Thankfully, there are ways to structure a lending agreement that help to ensure that all parties have access to what they need and ultimately benefit from the arrangement. In instances involving a great deal of money being leant and/or the borrower in question would otherwise have a rough time convincing a lender to take a chance on making a borrowing opportunity available, constructing a secured promissory note can be extremely helpful to both parties.


If you are looking to lend or borrow money and circumstances make the lending scenario disproportionately risky for the lender, consider using this secured promissory note template to outline the terms of your lending agreement. This promissory note structure differs from a standard promissory note in that it requires the borrower to identify significant collateral to be paid in the event that the borrower cannot make good on the terms of the loan. This critical difference allows borrowers to secure financing even when their situation is unusually risky and allows lenders to feel confident that they will secure payment in one form or another. Depending on your unique circumstances, this particular legal tool may allow you to move forward with a lending agreement that might otherwise be considered unreasonably burdensome for the lender.

Alternative Names

Loan Security Agreement
Secured Note Payable Form