Document background
A Loan Note is a fundamental financing instrument used in the United Arab Emirates to document and formalize debt obligations between parties. This document is typically employed when a lender provides financing to a borrower and requires a formal acknowledgment of debt that can be easily transferred or used as security. The Loan Note must comply with UAE Federal Laws, including the Civil Code and Commercial Code, while also considering Sharia principles, particularly in relation to interest (riba) structures. It serves as evidence of debt and includes essential terms such as principal amount, profit rate, repayment terms, and security arrangements. The document is commonly used in both corporate and personal lending scenarios and can be structured to accommodate both conventional and Islamic financing requirements.
