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A loan note is a type of financial instrument; it is a contract for a loan that specifies when the loan must be repaid and usually also the interest payable. It is similar to a promissory note but the differences can be significant in terms of consequences, especially tax consequences.
In finance, a loan is the tender of money by one party to another with an agreement to pay it back. The recipient, or borrower, incurs a debt and is usually required to pay interest for the use of the money.
The term "loan contract" is often used to describe a contract that is lengthy and detailed. A promissory note is very similar to a loan. Each is a legally binding contract to unconditionally repay a specified amount within a defined time frame. However, a promissory note is generally less detailed and less rigid than a loan contract. [6]
A loan agreement (also known as a lending agreement [1]) is a contract between a borrower and a lender which regulates the mutual promises made by each party.
Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership, interest in an entity or a contractual right to receive or deliver in the form of currency (forex); debt (bonds, loans); equity (); or derivatives (options, futures, forwards).
Advance payments made as a loan are generally repayable but this is not always the case. In Leibson Corporation and Others v TOC Investments Corporation and Others, an English Court of Appeal case in 2018, [3] it was established following principles of contractual interpretation that, in the absence of any specific language to the contrary, an "advance" is not always repayable.
[8] [1] Factoring is the sale of receivables, whereas invoice discounting ("assignment of accounts receivable" in American accounting) is a borrowing that involves the use of the accounts receivable assets as collateral for the loan. [1]
Hire purchase. A hire purchase (HP), [1] also known as an installment plan, is an arrangement whereby a customer agrees to a contract to acquire an asset by paying an initial installment (e.g., 40% of the total) and repaying the balance of the price of the asset plus interest over a period of time.