Standard Legal offers Promissory Notes with Personal Guarantees and Third Party Guarantees, but not ‘secured notes’.
The personal guarantees create leverage on both payment and for the ability to collect on the note.
Standard Legal does not offer promissory notes backed by ‘security’ because such a structure requires additional filings that can be legally complex and because the ‘security’ offered through collateral on a consumer type loan can be highly regulated. And in some states, security agreements on consumer or household goods may not be permitted.
For example, to secure a personal loan and promissory note, a lender could consider using a security agreement and a UCC financing statement that is filed with a government agency. The preparation and filing of UCC financing statements are meticulously governed by state law and often require precise language and specific state forms.
In addition, a lender could seek security for the promissory note using a mortgage on real property. Again, the permitted uses as well as the contents of a mortgage are closely regulated by state law. And filing of mortgages at a county level requires strict adherence with local rules and regulations.
Standard Legal believes that providing “blanket” UCC financing statements, security agreements or mortgages that may or may not be properly completed so as to meet state and local filing requirements, or which may or may not be appropriate for consumer transactions, do not best serve our customer needs.
To create a valid Promissory Note (without a security interest of course, based on the above), see Standard Legal’s Promissory Note legal forms software.