Definition

Noun: 1. A promissory note payable immediately upon the holder's request: A "demand note" is a type of debt instrument or IOU that does not have a fixed maturity date. The lender (the payee or holder) can demand repayment of the full principal amount at any time.

Usage

A "demand note" is used in financial and legal contexts to document a loan that is repayable on demand. It is a formal written promise to pay a specified sum of money. - The small business secured a loan from a private investor with a demand note. - The terms of the demand note state that the full balance is due immediately upon written request.

Advanced Usage

• Legal and Financial Instrument: In finance, a demand note provides flexibility to the lender but carries risk for the borrower, as repayment can be required unexpectedly. It is a legally binding document.
• Contrast with Time Note: Unlike a "time note" or "term note," which has a specified due date, a demand note is payable whenever the payee demands payment.

Variants and Related Words

• Promissory Note (n): A broader term for a written promise to pay a debt. A demand note is a specific type of promissory note.
• Note Payable (n): An accounting term for a liability representing a written promise of future payment.

Synonyms

• Call loan note: (Finance) A loan agreement repayable on demand.
• Note payable on demand: The direct descriptive synonym.

Related Phrases

• Payable on demand: The key phrase describing the repayment condition of the note.
  • The loan was structured as a note payable on demand.
• Presentment for payment: The formal act of demanding payment on the note.
  • The holder made a presentment for payment of the demand note.

Noun

1. a note payable on demand