Promissory Note Structuring – Part Two

In promissory note investing, understanding is more important than information.Promissory Note Structuring – Part Two Investing without understanding is like playing poker without looking at the cards. In order to properly structure a promissory note loan file it is vital to understand the implications and the interpretations that the documents create. Every word and every document in the loan file might become important – depending upon who is reading it and why it is being read. Typical readers: prospective purchaser, trial judge, a delinquent borrower.

Putting together a good, solid enforceable promissory note loan file is not something to do using “on-the-job-training.” – it requires an experienced specialist to do it right the first time.

The typical attorney is trained to make the promissory note loan documents enforceable in a court of law. He or she is not trained in law school to make the loan file collectable and marketable. Accomplishing collectability and marketability is the job of a promissory note specialist.

You, as the investor, want to have all three key components contained within your note investment – enforceability, collectability, and marketability-so that your investment has maximum protection and marketability.

There are numerous components that impact the value of a loan file. Without going into deep detail on any one item, I would like to point out several important ones that you, as an investor, or a potential investor should focus on. Do not hesitate to involve a promissory note specialist for guidance.

Negotiable Instrument
A well drafted promissory note should comply with a set of legal rules that cause it to be readily transferrable and saleable. Without trying to define all of the elements necessary, we say that a bank check, a bank note, a corporate bond, and a US Government bond are all examples of “negotiable instruments”. That is the category that we want our…

Source by Lawrence Tepper

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