Idaho Promissory Note



    Last Updated:

    An Idaho Promissory Note functions akin to an IOU, albeit slightly more structured. It's a pact between two entities, where one procures money from the other and pledges to repay it. It encapsulates all the vital particulars, such as repayment timeframe and any interest fees. More than merely a verbal agreement, it serves as a legally enforceable contract that maintains transparency and accuracy for all parties implicated.

    What is the Usury Rate for Idaho?

    Fundamentally, a usury rate signifies the maximum lawful interest rate permitted on lending transactions. Imposing above this rate culminates in "usury," deemed illegitimate. Rates fluctuate amongst states, making it vital to comprehend the rules within your distinct region. Grasping the usury rate guarantees sensible borrowing, sidestepping potentially detrimental circumstances. Hence, it's a critical figure to apprehend when contemplating a loan for your enterprise.


    For Idaho, unless agreed to in writing, the rate is 12%. The interest rate on money due on court judgments is 5%. (Idaho Code Ann. § 28-22-104)

    Contract Template


    📄 Download
    📄 Word Template 📄 PDF Template
     

    Read on to learn more about Idaho Promissory Notes, including:

    What's included in an Idaho Promissory Note?

    Here are some key components that are typically included in an Idaho Promissory Note:

    1. Amount and Terms of the Loan
    2. Closing and Delivery
    3. Representations, Warranties the Company
       
      1. Organization, Good Standing and Qualification
      2. Corporate Power
      3. Authorization
      4. Compliance with Laws
      5. Use of Proceeds

    1. Amount and Terms of the Loan

    "The Loan" outlines the specific sum of money you're extending to the firm. This subsection is vital as it ensures explicitness and security for all parties concerned. To finalize this clause, merely input the loan sum in the given empty space. Additionally, scrutinize "Exhibit A", exhibiting the promissory note acting as the documented authentication and proof of the loan.

    Fundamentally—this crucial provision illuminates the capital you're committing, establishing a lucid basis for your promissory note arrangement.

    The Loan.  Subject to the terms of this Agreement, Purchaser agrees to lend to the Company at the Closing $_________ (“Loan Amount”) against the issuance and delivery by the Company of a promissory note for such amount, attached as EXHIBIT A (“Note”). 

    2. Closing and Delivery

    The CLOSING AND DELIVERY clause delineates the concluding phases of your promissory note contract. Within Closing, you'll denote the instant the transaction culminates. This date can be mutually agreed upon, not restricted solely to the contract inception date.

    Delivery characterizes the exchange mechanism: the lender bestows the loan sum onto the company, and reciprocally, the corporation proffers the lender with the finalized promissory note, attesting the lender's repayment duty. This reciprocal transfer guarantees lucidity and dedication from all engaged entities.

    CLOSING AND DELIVERY


    Closing.  The closing of the sale and purchase of the Notes (the “Closing”) will be held on the Effective Date, or at such other time as the Company and Purchasers may mutually agree (such date is referred to as the “Closing Date”).

     

    Delivery.  At the Closing (i) Purchaser will deliver to the Company a check or wire transfer funds in the amount of the Loan Amount; and (ii) the Company will issue and deliver to Purchaser a Note in favor of Purchaser payable in the principal amount of Purchaser’s Loan Amount.

    3. Representation, Warranties The Company

    This segment addresses the firm's affirmations regarding the veracity of crucial particulars. They're legally obliged to maintain preciseness, averting potential legal complications. Incorporate pertinent data about the establishment's finances, functions, or legal affairs. Sustaining faith and clarity in your contract is of utmost importance.

    a. Organization, Good Standing and Qualification

    The Organization, Good Standing, and Qualification section verifies the corporation's lawful status. Highlight the locale where the entity is rooted, promoting smooth operations and building confidence amongst all involved parties.

    Organization, Good Standing and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of [State].  The Company has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted.  The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.

    b. Corporate Power

    The Corporate Power part validates the establishment's legal competence to enact this contract and satisfy its obligations. Fundamentally, it declares, "Our organization possesses the legal sanction for this transaction." This is crucial in reinforcing faith and legality. Therefore, it's imperative to include this clause and thoroughly comprehend it.

    Corporate Power.  The Company has all requisite corporate power to execute and deliver this Agreement, to issue the Note and to carry out and perform its obligations under the terms of the Note.  

    c. Authorization

    The Authorization segment incorporates the approval of corporate stockholders and ensures the note's lawful validity. It's a vital element of your contract that affirms all required business processes are accomplished. This part safeguards both entities involved and lays a robust foundation for your agreement.

    Authorization.  All corporate action has been taken on the part of the Company, its directors and its stockholders necessary for the authorization of the Note and the execution, delivery and performance of all obligations of the Company under the Note.  The Note, when executed and delivered by the Company, will constitute valid and binding obligations of the Company enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors.

    d. Compliance with Laws

    The Compliance with Laws portion confirms that your organization isn't intentionally infringing any rules that could threaten its functioning. Including this clause reassures all entities of your firm's unwavering dedication to uphold legal standards.

    Compliance with Laws.  To its knowledge, the Company is not in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency in respect of the conduct of its business or the ownership of its properties, which violation would materially and adversely affect the business, assets, liabilities, financial condition or operations of the Company.

    e. Use of Proceeds

    The Use of Proceeds segment stipulates that the loaned capital is strictly for commercial endeavors, not individual. It's crucial in offering transparency and maintaining accountability with lenders.

    Use of Proceeds.  The Company will use the proceeds of the Note for the operations of its business, and not for any personal, family or household purpose.

    Can a promissory note be used without a mortgage?

    Indeed, it is achievable to use a promissory note without necessitating a mortgage. A promissory note operates like a legal pledge, detailing the conditions of a loan. Conversely, a mortgage serves as a loan security, tying it to assets such as properties. Promissory notes can be employed for both loan categories, secured and unsecured. Hence, operating a promissory note without a mortgage, essentially an unsecured loan, is certainly plausible. However, it's commonly impossible to possess a mortgage without a promissory note, as this statement outlines your repayment plan and indicates your commitment to repay the loan.

    How do you collect from a promissory note?

    To recoup from a promissory note, start by calculating the comprehensive amount due, including interest and fees. Then, civilly compose a letter to the debtor. If payment isn't immediate, evaluate your legal options. Retain all relevant documents and seek legal counsel, given laws differ by location. Keep in mind, continuously harassing the borrower may breach legal boundaries. It's always prudent to consult a lawyer to skirt any possible mistakes.