what is a loan note 
a loan note is an extended form of a generic i owe you iou document from one party to another it enables a payee borrower to receive payments from a lender possibly with an interest rate attached over a set period of time and ending on the date at which the entire loan is to be repaid loan notes are usually provided in lieu of cash at the payee s request a loan note denotes a type of contract that typically outlines the legal obligations of the lender and the borrower a proper loan note will include a set of contractual penalties including the right to sue or seek arbitration if either party to the contract fails to meet or otherwise defaults on financial obligations 