Free Download

Secured Promissory Note Template – Free Download 2026

Download a professional secured promissory note template. Customizable for all 50 states, available in PDF and DOCX formats. Attorney-verified and ready to use.

Get Attorney-Drafted VersionDownload Free Template
Electronic Signature Accepted

Secured Promissory Note Template Preview

View the full template with all standard sections, state-specific clauses, and professional formatting. Free to view, no signup required.

Attorney-verified template · Free to view

When Do You Need a Secured Promissory Note?

You are lending money and want to secure the loan with collateral such as a vehicle, equipment, inventory, or other personal property that the lender can seize and sell if the borrower fails to repay. A secured note significantly reduces the lender's risk compared to an unsecured promissory note.

A borrower is offering property as collateral to obtain a lower interest rate on the loan. Secured loans typically carry lower rates because the collateral reduces the lender's loss exposure, and the note must clearly describe the collateral and reference the accompanying security agreement.

You need to document a loan secured by personal property (not real estate) and want to establish a perfected security interest under UCC Article 9 by filing a UCC-1 financing statement with the appropriate state office.

Your business is obtaining equipment financing or an inventory line of credit, and the lender requires a secured promissory note paired with a security agreement that grants the lender a lien on the specific business assets being financed.

You are lending to a startup or small business that lacks extensive credit history, and you need the additional protection of collateral to justify the loan. The secured note documents both the repayment obligation and the lender's right to the pledged assets upon default.

What Should a Secured Promissory Note Include?

Maker and Payee Identification

Identify the maker (borrower) and payee (lender) by full legal name and address. If either party is a business entity, include the entity type, state of formation, and the authorized signer's name and title. State the date the note is executed.

Principal Amount and Interest Rate

State the principal amount of the loan in numerals and words. Specify the annual interest rate, whether it is fixed or variable, and the interest calculation method (simple interest, compound interest, or 365/360 day basis). Confirm compliance with state usury laws.

Repayment Terms

Define the repayment structure, including the payment amount, frequency (monthly, quarterly), first and last payment dates, and final maturity date. Specify whether payments are principal-only, interest-only, or fully amortized. Include late payment fees and any grace period.

Collateral Description and Security Interest

Describe the collateral with sufficient specificity to identify it, including serial numbers, VIN numbers, or descriptions for equipment, vehicles, or inventory. Reference the separate security agreement that grants the lender a security interest in the described collateral under UCC Article 9.

UCC-1 Filing and Perfection

Include a provision stating that the lender will file a UCC-1 financing statement to perfect the security interest. Perfection establishes the lender's priority over other creditors who may later claim an interest in the same collateral. The maker should consent to the filing and agree to cooperate with any amendments.

Default, Acceleration, and Remedies

Define events of default, including missed payments, bankruptcy, and loss or disposal of collateral without lender consent. Include an acceleration clause and specify the lender's remedies upon default, including repossession of collateral, sale of collateral, and pursuit of a deficiency judgment for any remaining balance.

Signatures

The maker must sign the promissory note. While promissory notes can typically be signed electronically under the ESIGN Act, many lenders prefer wet ink signatures for the original. Notarization is not required for promissory notes in most states but adds an extra layer of authentication.

Signature Requirements

Electronic Signature Accepted

Secured promissory notes are valid with electronic signatures under the ESIGN Act. The borrower must sign the note, and the lender typically signs as well. Notarization is optional but may be required for notes secured by real property.

How to Fill Out a Secured Promissory Note

1

Enter Party Information

Fill in the full legal name and address of the maker (borrower) and payee (lender). If a business entity is involved, include the entity name, type, and state of formation.

2

Set the Loan Terms

Enter the principal amount, annual interest rate, and repayment schedule. Choose between installment payments, balloon payment, or demand structure. Calculate the monthly payment amount and confirm the maturity date.

3

Describe the Collateral

Provide a detailed description of the collateral securing the note. For vehicles, include the year, make, model, and VIN. For equipment, include manufacturer, model number, and serial number. For inventory or accounts receivable, describe the category and location.

4

Prepare the Security Agreement

Complete the companion security agreement that formally grants the lender a security interest in the collateral. The promissory note and security agreement work together but are separate documents. Both must be signed.

5

Set Default Provisions

Review and customize the default events, cure period, and lender remedies. Decide whether the lender must provide written notice before accelerating the loan and how many days the borrower has to cure a payment default (typically 10 to 15 days).

6

Sign and File UCC-1

The maker signs the promissory note and security agreement. The lender should then file a UCC-1 financing statement with the secretary of state (or equivalent office) in the state where the debtor is located to perfect the security interest and establish priority.

Free Template vs Custom Secured Promissory Note

FeatureFree TemplateCustom (AI or Attorney)
Basic secured note structure
Collateral description section
State-specific usury complianceRate limits vary by state-
UCC-1 filing guidance and references-
Attorney review and customization-
Digital download (PDF/Word)

Secured Promissory Note Template FAQ

What is a secured promissory note?
A secured promissory note is a written promise to repay a debt that is backed by collateral. The borrower (maker) pledges specific property, such as a vehicle, equipment, or inventory, as security for the loan. If the borrower fails to repay, the lender (payee) has the legal right to seize and sell the collateral to recover the outstanding balance. The security interest is created through a separate security agreement and perfected by filing a UCC-1 financing statement with the state.
What is the difference between secured and unsecured promissory note?
A secured promissory note is backed by collateral that the lender can seize if the borrower defaults, while an unsecured promissory note relies solely on the borrower's promise to repay with no collateral attached. Secured notes typically carry lower interest rates because the lender's risk is reduced by the collateral. In a default, the secured lender can repossess and sell the collateral, while an unsecured lender must file a lawsuit, obtain a judgment, and then pursue collection through wage garnishment or bank levies.
What can be used as collateral for a promissory note?
Almost any asset of value can serve as collateral for a promissory note. Common types include vehicles, equipment, machinery, inventory, accounts receivable, investment accounts, and intellectual property. Real property (land and buildings) can also serve as collateral, but that arrangement is typically documented through a mortgage or deed of trust rather than a UCC security agreement. The collateral must be described with enough specificity in the security agreement to be identifiable.
Does a secured note need to be filed?
The secured note itself does not need to be filed. However, the lender must file a UCC-1 financing statement with the appropriate state office (typically the secretary of state) to perfect the security interest in the collateral. Perfection is critical because it establishes the lender's priority over other creditors who may later claim an interest in the same collateral. Without filing, the lender has an unperfected security interest that is subordinate to perfected creditors and a bankruptcy trustee.
What is a UCC filing?
A UCC filing, specifically a UCC-1 financing statement, is a public notice filed with the secretary of state that alerts other creditors and the public that a lender claims a security interest in specific collateral belonging to a debtor. The filing is governed by UCC Article 9 and is the primary method for perfecting a security interest in personal property. UCC filings are indexed by debtor name and can be searched by anyone. They are typically effective for five years and must be renewed by filing a continuation statement before expiration.
What happens if you default on a secured note?
When a borrower defaults on a secured note, the lender can accelerate the loan and demand full payment of the remaining balance. If the borrower cannot pay, the lender can repossess the collateral and sell it to satisfy the debt. Under UCC Article 9, the lender must conduct the sale in a commercially reasonable manner and provide the borrower with notice. If the sale proceeds are less than the outstanding balance, the lender can pursue a deficiency judgment against the borrower for the difference.
Is a secured promissory note the same as a mortgage?
No, a secured promissory note and a mortgage are different documents that serve different purposes. A promissory note is the borrower's promise to repay the loan. A mortgage (or deed of trust) is the security instrument that pledges real property as collateral and is recorded in the county land records. In a typical home purchase, the buyer signs both a promissory note and a mortgage. A secured promissory note backed by personal property (not real estate) uses a UCC security agreement instead of a mortgage.
Do promissory notes need to be notarized?
Promissory notes generally do not need to be notarized to be legally enforceable. The maker's signature is sufficient to create a binding obligation. However, notarization adds an extra layer of authentication by having a notary public verify the maker's identity and witness the signature. Some lenders request notarization as a precaution against future claims that the signature was forged. If the note is accompanied by a security agreement involving real property, the security instrument (mortgage or deed of trust) does need to be notarized for recording.

More Free Templates

Power of Attorney Template

Estate Planning

Free Non-Disclosure Agreement Form

Contracts & Agreements

Bill of Sale Download

Contracts & Agreements

Printable Last Will and Testament

Estate Planning

Need a Customized Secured Promissory Note?

Most clients choose our attorney-drafted option for a secured promissory note fully personalized to their situation by a licensed attorney. Need it fast and affordable? Try our AI generator as a quick alternative.

Get Attorney-Drafted VersionQuick AI Generator
Attorney Drafting Services·AI Document Generators·Template Library·View Plans

Attorney-Verified Document: All Legal Tank templates are drafted and reviewed by licensed attorneys to ensure legal accuracy and compliance with current state and federal laws. While our templates meet professional legal standards, individual circumstances vary. We recommend consulting with a licensed attorney in your jurisdiction for complex or high-stakes legal matters. Legal Tank is not a law firm and use of our platform does not create an attorney-client relationship.

Reviewed by licensed attorneys · Editorial policy · Last updated March 2026

Need this document customized for your situation?

Generate with AIGet Attorney-Drafted Version