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Definition
A loan note is a debt instrument recording a loan’s principal, interest rate and repayment terms. Investors and shareholders often lend via loan notes, which can be transferable and may rank as subordinated debt.
In plain terms
It is a formalised loan on paper, common when directors or investors put money in as debt rather than equity. A convertible version can later turn into shares.
Why it matters for your company
Loan notes structure investor funding cleanly and can be subordinated to bank debt via an intercreditor agreement, reassuring senior lenders. See convertible loan note.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.