Promissory Note And Security Agreement Template for England and Wales

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Key Requirements PROMPT example:

Promissory Note And Security Agreement

I need a Promissory Note and Security Agreement for a £500,000 business loan to be secured against our company's manufacturing equipment, with quarterly repayments over 5 years starting from March 2025.

Document background
A Promissory Note and Security Agreement is commonly used in lending transactions where a lender requires both a formal acknowledgment of debt and security over assets. This document type, governed by English and Welsh law, provides protection for lenders while offering borrowers a structured repayment framework. It includes detailed terms about the loan amount, interest rates, payment schedule, and specific assets provided as security. The agreement is particularly useful in commercial lending, asset-based financing, and structured private loans where formal security is required.
Suggested Sections

1. Parties: Identification of lender and borrower with full legal names and addresses

2. Background: Context of the loan and security arrangement

3. Definitions: Key terms used throughout the document

4. Promise to Pay: Core promise to repay the principal amount with specified interest

5. Payment Terms: Details of payment schedule, interest rates, and payment methods

6. Security Grant: Description of collateral and grant of security interest

7. Default Provisions: Events of default and consequences

8. Enforcement Rights: Lender's rights upon default

Optional Sections

1. Prepayment Provisions: Terms for early repayment, use when early repayment is permitted

2. Guarantor Provisions: Include when there is a guarantor for the loan

3. Insurance Requirements: Include when specific insurance is required for the collateral

4. Cross-Default Provisions: Include when there are multiple related agreements

Suggested Schedules

1. Schedule of Payments: Detailed payment schedule with dates and amounts

2. Schedule of Secured Assets: Detailed description of all assets serving as collateral

3. Form of Notice: Template for any required notices under the agreement

4. Conditions Precedent: List of conditions that must be met before drawdown

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

Relevant legal definitions
Clauses
Industries

Law of Property Act 1925: Key legislation governing creation and enforcement of security interests and requirements for legal charges in England and Wales

Bills of Exchange Act 1882: Primary legislation governing promissory notes, including requirements for negotiable instruments and formal content requirements

Consumer Credit Act 1974: Regulates consumer credit agreements, including mandatory terms, disclosures, and cooling-off periods if the agreement involves consumers

Financial Services and Markets Act 2000: Establishes regulatory framework for financial services and may apply if the arrangement falls within regulated activities

Companies Act 2006: Governs corporate security aspects including registration requirements, company charges, and filing obligations

Enterprise Act 2002: Contains provisions regarding enforcement and receivership rules for security agreements

Common Law Contract Principles: Fundamental principles including offer, acceptance, consideration, and intention to create legal relations

Unfair Contract Terms Act 1977: Governs reasonableness of contract terms and limitations on exclusion clauses

Companies House Requirements: Administrative requirements for registration of charges and filing deadlines when corporate entities are involved

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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