Florida Promissory Notes: Requirements, Types & Differences

Secured & unsecured promissory note FloridaA promissory note Florida is an instrument for borrowing money from one party to another that is common in many personal and business settings. Here, you'll learn more about Florida promissory note types, including secured and unsecured, along with requirements and a template for further understanding. 

The Purpose of Promissory Notes in Florida Law

The purpose of a Florida promissory note is to create a legally enforceable financial instrument that states the key terms to a loan agreement. As the name suggests, a promissory note involves a “promise” from the borrower under the note to repay the stated amount of money to the lender. 

Secured vs Unsecured Promissory Note, What's the Difference?

A Florida promissory note can be either secured or unsecured. A secured promissory note is one that is backed by collateral (e.g., real estate, a business interest, intellectual property, or some other personal property held by the borrower). An unsecured promissory note has no collateral. 

The collateral (also known as a security interest) provides the lender with some recourse in the event of defaults. The lender can retain or sell the underlying property used as collateral to recover any losses from the default. 

An unsecured promissory note is simply one that does not have any attached collateral or security interest. If a borrower fails to meet its repayment requirements, the lender does not have any inherent property interests and will generally have to obtain a court judgment for recourse. 

Using a secured versus unsecured promissory note will be an important business decision often determined by the relationship between the borrower and lender and the amount of the note. In many cases, having a promissory note secured by collateral is preferable. The collateral can help a lender prevent losses in the event of a borrower default due to late payment or other breach of contract. 

Different Types of Promissory Note & When to Use Them

A promissory note for borrowing money will have different types depending on the context of the loan agreement. The key piece of this context usually has to do with the reason for the loan and the borrower's intended use for the funds. That reason is often either personal or commercial in nature. 

Personal Promissory Notes

Personal promissory notes are those between individuals (e.g., family members or friends) who would like to help the borrower financially but do not want to gift money. You might use a personal promissory note to pay for things like school, a car, a down payment on real property or some other consumer use.

Commercial Promissory Notes 

A commercial promissory note is standard in many business deals that involve financing. The borrower and lender are often business entities rather than individuals and the purpose is in furtherance of some commercial goal. Common types of commercial notes include: 

  • Financing the purchase of real estate 
  • Business loans (i.e., funds to start or continue operation of a commercial venture)
  • Investments and raising capital (i.e., a lender may loan funds to a business and receive an ownership interest in the business in addition to repayment of the loan as consideration). 

Commercial promissory notes tend to be sophisticated and are often paired with other agreements or legal documents of a business deal. For example, you may have a security agreement, asset purchase agreement, NDA, shareholder agreement, and other written agreements that accompany the note. 

What Are the Florida Promissory Note Requirements?

A promissory note Florida requires several terms stated clearly in the written instrument that explain the key rights and obligations for both the lender and borrower. Some of these requirements include: 

  • Interest rate and how it accrues (e.g., per annum)
  • Principal sum (i.e., the loan amount)
  • Due date (This includes the due date for an installment payment and the maturity date when the borrower must repay full loan amount)
  • Late fees in the event of nonpayment or late payment 
  • Mailing address of the borrower and lender 

Florida Promissory Note Witness Requirements

In general, having a witness or notary public to a promissory note is a good precaution to protect the authenticity of the note in the event a party must use it as evidence to enforce its terms. 

The Cost of Reasonable Attorney's Fees 

A promissory note should state who will cover the cost of paying reasonable attorney's fees in the event a party has to enforce the note. In most cases, the note will state the borrower has the obligation to pay the lender's reasonable attorney's fees for enforcement. 

Florida Statutes That Affect Promissory Notes 

A couple of Florida laws relate to promissory notes that both lenders and borrowers should be aware of before entering into a loan agreement. For example, Florida statute has usury rates that lenders should know to avoid predatory lending practices. For loans under $500,000, interest rates cannot exceed 18 percent simple interest per annum. 

The state of Florida also has a documentary stamp tax in the amount of 35 cents for every $100 loaned up to a total amount of $2,540. 

Sample Promissory Note Florida Template 

You can download our Florida secured promissory note form for more information about what goes into a promissory note secured by collateral.  This template is only for educational purposes and you should not use it without first consulting a lawyer.

Sample unsecured promissary notes

Unsecured promissory note Florida Word

Unsecured promissory note Florida PDF

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Sample secured promissary notes

Secured promissory note Florida Word

Secured promissory note Florida PDF

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Need Help with Promissory Note Florida Law?

A promissory note for borrowing money is a useful instrument for a variety of financial and business arrangements. The attorneys at Cueto Law Group regularly assist clients with drafting, negotiating, and reviewing promissory notes for both personal and commercial uses. 

Contact Cueto Law Group today to schedule a consultation concerning Florida promissory notes. 


Who Is a Guarantor in a Promissory Note?

A guarantor is a person or entity (other than the borrower) who agrees to perform the borrower's obligations under a loan agreement in the event of default such as nonpayment. Some lenders will require a guarantor for a loan because of risks that a borrower will not be able to repay.

What Is a Waiver of a Promissory Note?

In some cases, a lender may waive the obligations of the borrower under a promissory note. Often this happens with loans between friends and family members or for the restructuring of business deals. However, parties should be careful of tax consequences such as gifting or discharges of indebtedness in these cases.

Are Promissory Note Prepayments Allowed?

The terms of a promissory note should state if the borrower can make prepayments to fully repay the principal balance of a loan prior to the maturity date. Sometimes prepayments are allowed without question, but a lender may not allow for early payments.