Financial Promissory Note for Australia

Financial Promissory Note Template for Australia

A legally binding financial instrument governed by Australian law, specifically the Bills of Exchange Act 1909 (Cth) and related legislation, that documents a written promise by one party (the Maker) to pay a specific sum of money to another party (the Payee). The document includes essential terms such as the principal amount, interest rate, payment schedule, and maturity date, while also incorporating provisions for default, security (if applicable), and enforcement mechanisms. It serves as a formal acknowledgment of debt and can be used in both commercial and private contexts within the Australian jurisdiction.

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What is a Financial Promissory Note?

The Financial Promissory Note is a vital instrument in Australian financial transactions, used to formalize debt obligations between parties. It serves as a legally enforceable document under Australian law, particularly the Bills of Exchange Act 1909 (Cth) and related financial services legislation. This document is commonly used in various scenarios, including business loans, private lending arrangements, and structured payment agreements. The Financial Promissory Note must contain specific elements to be legally valid, including an unconditional promise to pay, a defined principal amount, specified payment terms, and clear identification of all parties involved. It can be secured or unsecured and may include additional provisions such as guarantees, security arrangements, or specific default terms.

What sections should be included in a Financial Promissory Note?

1. Parties: Identifies the Maker (Promisor) and the Payee (Promisee) with full legal names and addresses

2. Promise to Pay: Clear statement of the unconditional promise to pay, including the principal amount in both numbers and words

3. Payment Terms: Specifies the payment schedule, interest rate, and method of payment

4. Due Date: States the maturity date or payment deadline

5. Interest Rate: Details of the applicable interest rate, calculation method, and payment frequency

6. Default Provisions: Consequences of default, including acceleration clause and late payment penalties

7. Governing Law: Specifies that Australian law governs the promissory note

8. Execution: Signature blocks for all parties and date of execution

What sections are optional to include in a Financial Promissory Note?

1. Security: Include when the note is secured by collateral or other assets

2. Prepayment Terms: Include when early payment is allowed, specifying any penalties or conditions

3. Transferability: Include when the note can be transferred or assigned to other parties

4. Guarantor: Include when a third party guarantees the payment

5. Events of Default: Include when specific circumstances triggering default need to be detailed

6. Notice Requirements: Include when specific notice procedures need to be followed

7. Amendment Provisions: Include when modification terms need to be specified

What schedules should be included in a Financial Promissory Note?

1. Payment Schedule: Detailed breakdown of payment dates and amounts, particularly for installment payments

2. Security Details: Description and documentation of any collateral or security arrangements

3. Interest Calculation Schedule: Detailed methodology for interest calculations if complex

4. Guarantor Information: Details of guarantor and terms of guarantee if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant Industries

Financial Services

Banking

Private Lending

Real Estate

Commercial Business

Small Business

Agriculture

Manufacturing

Professional Services

Construction

Retail

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Credit Administration

Corporate Banking

Commercial Lending

Documentation

Loan Operations

Relevant Roles

Chief Financial Officer

Finance Manager

Legal Counsel

Compliance Officer

Credit Manager

Financial Controller

Treasury Manager

Risk Manager

Loan Officer

Corporate Lawyer

Banking Executive

Account Manager

Financial Advisor

Business Development Manager

Contract Administrator

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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