Investment Promissory Note Law and Legal Definition

Investment promissory note refers to the promissory notes utilized by some organizations to raise capital for business purposes. Investment notes are issued by investors in substitute for loan. Investors who invest in a company also take the risk of losing their investment money. Therefore, some investors prefer to invest with an investment loan requiring the business or individual company they have invested to repay the money, regardless of the company's success. The borrower must sign the investment promissory note and should undertake to pay all monies that the lender initially invested, unless the note states otherwise. Sometimes the investors may seek ownership in the company in return for their investment. Investment notes guarantee investors that they will receive a return on their investment within a specified period of time.