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Secured Promissory Note for Indonesia

Secured Promissory Note Template for Indonesia

A Secured Promissory Note under Indonesian law is a formal debt instrument that combines a promise to pay with security interests in specific assets. The document is governed by Indonesian civil law principles and various financial regulations, including Law No. 42 of 1999 on Fiduciary Security and the Indonesian Civil Code. It provides creditors with both a clear payment obligation and the right to claim specific collateral in case of default, making it a stronger instrument than an unsecured note. The document must comply with Indonesian formal requirements for both promissory notes and security agreements, including proper registration of the security interest with relevant authorities.

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What is a Secured Promissory Note?

A Secured Promissory Note is commonly used in Indonesian business transactions where parties seek to document a debt obligation while providing security for the payment. This document type combines the simplicity of a promissory note with the protection of a security agreement, making it particularly useful for business loans, asset financing, and commercial transactions. The security aspect requires compliance with Indonesian security interest laws, including proper registration under Law No. 42 of 1999 on Fiduciary Security or Law No. 4 of 1996 on Land Mortgage, depending on the collateral type. The document typically includes detailed descriptions of the collateral, payment terms, and enforcement mechanisms, providing clarity and protection for both the creditor and debtor while ensuring compliance with Indonesian banking and financial regulations.

What sections should be included in a Secured Promissory Note?

1. Identification of Parties: Full legal names and addresses of the Maker (Promisor) and Payee (Promisee)

2. Promise to Pay: Unconditional promise to pay a specific sum of money, including the principal amount in both numbers and words

3. Payment Terms: Details of payment schedule, interest rate, maturity date, and method of payment

4. Security Interest: Description of the collateral securing the note and the nature of the security interest

5. Default Provisions: Definition of events of default and consequences, including acceleration clause

6. Enforcement Rights: Rights of the Payee to enforce the security interest upon default

7. Governing Law: Specification that Indonesian law governs the note

8. Execution: Date, place of execution, and signature blocks

What sections are optional to include in a Secured Promissory Note?

1. Prepayment Provisions: Terms allowing early payment of the note, including any penalties or rewards - include when early repayment is contemplated

2. Late Payment Penalties: Additional charges or increased interest rates for late payments - include when specific penalties are desired

3. Assignment Rights: Terms governing the transfer or assignment of the note - include when the note may need to be transferred

4. Insurance Requirements: Obligations to maintain insurance on collateral - include when collateral requires protection

5. Representations and Warranties: Statements about the condition and ownership of collateral - include for complex collateral arrangements

6. Cross-Default Provisions: Links to defaults under other agreements - include when there are related agreements

7. Currency Provisions: Specifications for payment in foreign currency - include for international transactions

What schedules should be included in a Secured Promissory Note?

1. Schedule A - Collateral Description: Detailed description of all assets serving as collateral, including registration numbers or identifying features

2. Schedule B - Payment Schedule: Detailed amortization schedule showing payment dates, amounts, and allocation between principal and interest

3. Schedule C - Security Registration Details: Details of security interest registration with relevant authorities

4. Appendix 1 - Collateral Photographs: Visual documentation of physical collateral where applicable

5. Appendix 2 - Title Documents: Copies of relevant ownership documents for the collateral

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Ƶ

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions





























Clauses




























Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Agriculture

Mining

Construction

Trading and Distribution

Technology

Small and Medium Enterprises

Retail

Infrastructure

Energy

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit Administration

Collections

Corporate Secretariat

Business Development

Account Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Credit Manager

Risk Manager

Legal Counsel

Corporate Secretary

Financial Controller

Loan Officer

Compliance Officer

Security Trustee

Collections Manager

Business Development Manager

Account Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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