A promissory note is a written contract between two or more "parties"
where there is a "promise" made to another that s/he will pay the amount
"owed" within a specified time frame. The promissory note may include
interest, and can be used for writting no loss loans, just like a bank would.
If, for example, one wants or needs to buy an item or borrow money, the purchaser
will sign a promissory note that states s/he will pay the amount owed plus any
interest by a specific date or on demand. Promissary notes differ from IOUs in
that they contain a specific promise to pay, rather than simply acknowledging
a debt.
Traditionally banks make their money by making loans
and
charging interest on the loan, or buy selling the loan
agreements to third
parties.
Since banks have no monopoly on lending money, individuals
can
use promissory notes to make private loans and cash
in just as bankers do.
Throughout history, promissory notes have also been used
as a form of private
currency not bound by government
controls or restrictions.
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Promissory notes can even be used to purchase a home.
This is how it works;
the seller of the home continues to
hold the mortgage and then accepts a promissory
note
from the buyer who agrees to pay the price of the home,
plus interest,
in regular installments.
Both the seller and buyer benefit from this arrangement
in that the seller still holds the mortgage, has a monthly
revenue stream
and has not incurred the cost of real
estate agents, bankers or mortgage
brokers, and the
buyer benefits by not having to hunt for, or qualify for
a traditional loan from a bank or mortgage company.
BENEFITS:
• EASY TO USE
• GAINS CONFIDENECE
• CREATES A REPUTATION
OF DOING GOOD BUSINESS
• CREATES TRUST
• CREATES YOUR OWN SOURCE
OF CREDIT
• SAVES TIME, MONEY AND THIRD PARTY HASSLES
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