When a person or entity (“Lender”) loans money to another person or entity (“Borrower”), the loan is typically formalized with a promissory note. A secured promissory note (on demand) is a written promise in which the borrower has pledged some asset as collateral for repayment to the Lender. In an on-demand promissory note, the Borrower promises to repay the loan and accrued interest, if any, at any time upon the request of the Lender. A promissory note will set forth, among other things, the repayment schedule, the interest rate, and defaults.
In the case of a secured promissory note, the Lender has been given some additional assurance, in the form of collateral, in case the Borrower fails to repay the loan. To ensure that the pledged collateral is collectible in the case of a default, the parties will usually enter into another agreement-a security agreement. A security agreement sets out the rights of the Lender with regard to the collateral.
Definition of Secured (On Demand) Promissory Note.
You can find various examples of Secured (On Demand) Promissory Notes here.