What is a Promissory Note?

• A. A contract requiring the producer to repay the bank loan + interest by a certain date. Not tied to the success of the film.
• B. A loan agreement detailing collateral
• C. A lease agreement for equipment
• D. An equity investment agreement

Answer: (A)

A promissory note is a written promise to pay a specific amount of money by a certain date, usually with interest. It creates a straightforward debt obligation and is not dependent on how the film performs. In film financing, this documents the borrower's obligation to repay the lender, separate from ownership or revenue outcomes.

This best describes a promissory note because it focuses on the debtor’s promise to repay a fixed amount by a due date, which is the essence of a promissory note. It’s different from a loan agreement that often spells out collateral and other terms, from a lease for equipment, or from an equity investment, which involves ownership and profit-sharing rather than a fixed repayment obligation.