Once the promissory note reaches its maturity date, its current holder (the bank) can execute it over the emitter of the note (the debtor), who would have to pay the bank the amount promised in the note. If the maker fails to pay, however, the bank retains the right to go to the company that cashed the promissory note in, and demand payment. You are loaning a person money and want a record of the agreement.You are accepting a loan from someone and want the terms in writing.The loan includes interests and payment information that needs to be outlined. A signed IOU Form shows the lender that the borrower is, in good faith, planning on paying back the loan. And if they don't, they have a legal document that can be used to recover what is owed to them. However, even if yours is an unsecured promissory note (ie. no property has been offered as security/collateral), you will also have other avenues of recourse. Not only does the IOU provide security for the lender, but it also gives the borrower a minute to pause and reflect on whether the risk of taking on the loan is worth ruining relationships if they can't pay it back. “Hey, hun!” Mike says and kisses her on the forehead. She is covered (as the entire kitchen seems to be) in some sort of buckwheat-quinoa-something-hipster flour.