Non-Recourse, Non-Negotiable Promissory Note

, hereinafter referred to as the MAKER, unconditionally promises to pay to ___________, hereinafter referred to as the HOLDER, the principal sum of $. (___________________________ & ___/100 Dollars), together with interest at the annual rate of ___ percent. However, under no circumstances shall the interest rate exceed the maximum rate permitted by applicable usury and interest laws. In the event that interest is paid in excess of this lawful limit, the excess amount shall be applied as a credit against the outstanding principal balance.

This Promissory Note is payable on demand.

In the event of default, all outstanding amounts shall accrue interest at the highest rate allowed by law. THIS IS A NON-RECOURSE NOTE, meaning the HOLDER may not seek payment from the personal assets of the MAKER. The MAKER does not consent to the use of any personal property or assets to satisfy this debt. However, the HOLDER may pursue legal or equitable remedies, including foreclosure, against any specific collateral pledged for this obligation. Any deficiency remaining after the enforcement of such remedies shall not become a personal liability of the MAKER.

The HOLDER shall be entitled to recover reasonable attorney’s fees and other costs associated with collection, but only from the proceeds realized through foreclosure or enforcement of rights against pledged collateral, if any. These legal and collection costs shall not be enforceable against the MAKER personally, nor shall any of the MAKER’s personal assets be subject to their payment. Nonetheless, any specifically pledged property may be pursued through lawful remedies.

Dated: _____________________________________

MAKER

How to Use This Sample Format

This guidance is provided to help you understand the purpose and use of this document. This note format is highly favorable to the borrower and places significant limitations on the lender’s ability to recover funds. If you are the lender, it is essential that the loan is secured with sufficient collateral to ensure repayment. If you are the borrower, obtaining such terms is extremely advantageous—typically achievable only through parties such as close family members or individuals with a strong desire to assist.

Make multiple signed copies of the completed note and provide one to each party involved.