Can I sell unsecured promissory note?

Unsecured notes or Debentures are a way for commerce to raise money from investors. In return for your cash, the business or the one issuing the unsecured note promises to pay you interest and reimburse the cash you lend it or your capital at a forthcoming date.

An investment can be called a debenture in documents relating to a proposal if the security in place is over tangible property of the issuer. Unsecured notes, in contrast, are mostly riskier than unlisted debentures as there is no tangible property provided as security for shareholders.

By investing in an unsecured note, you are lending your cash to a business, with all the risks that this takes in. The issuer may use your money to finance a wide range of business activities. It may also lend your cash to another business, termed as on-lending.

Debentures and unsecured notes are fixed interest investments. This simply means that the interest rate on the cash you lend is set in advance. On the other hand, interest payments on your money and the return of your investment are not certain.

Can It Be Sold?

Unsecured notes are notes that aren’t backed up by any form of collateral such as home, vacant land, and others. They can still be purchased, but are a much riskier investment and so a higher markdown should be expected. Such notes are too often uninsured and subordinated.

One of the main factors that will determine the value of an unsecured note is the borrower credit score.  What that shows us is how the borrower is paying back other people.  The credit score basically says how HONEST the person is.  Will they fight when times get tough to honor their promises to pay the creditors.  If you don’t know how to check credit then you can click this link to get a free report.

The individual note will need to be assessed by the same criteria as other notes. Northstar Investment Group doesn’t purchase unsecured notes but contact us at 754-223-9970 if you’re unsure if you have unsecured note or not.