Secured Note

January 30, 2014  |     |     |   0 Comment

A secured note is a form of debt secured by collateral. If the borrower defaults on the note, then the collateral can be sold to recover the remaining debt payments. This is the opposite of an unsecured note in which no collateral is pledged to secure the debt.

As such, due to the lower risk level in a secured note, interest rates are generally lower on secured notes than unsecured notes. In website deals involving seller financing, a promissory note is generally used. It is up to the parties involved in the transaction to determine is they want this note to be secured or unsecured by collateral.

Author: 

Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.

    Connect with Kris:
  • linkedin
« Back to Glossary Index

Comments are closed.