Loan notes are usually provided in lieu of cash at the payee's request.
A loan note can help an individual investor avoid an undue tax hit resulting from a lump sum payment from a settlement or cash-out package from a company. In these cases, the individual is given a choice between cash or a loan note.
When loan notes are used between businesses, the purchaser is able to act as a borrower and make payments over time, often at a minimal or "at cost" interest rate.
Investment dictionary. Academic. 2012.
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