Promissory notes that are negotiable are called cash flow notes. These are debt instruments that can either be bought or sold, or in other words, IOUs. As the borrower is faced to lose something when the terms in the note are not met, then these notes are secured. Examples of the different types of cash flow notes include real estate notes, business notes, and structured settlements.
Real Estate Notes
Notes that have been secured against the assets of by actual property such as car, house, etc. are real estate cash flow notes. The mortgaged real property that secures the real estate notes is the property or assets used to secure the real estate cash flow. The property of the borrowing individual is confiscated to recover the notes if he/she fled.
A trust or mortgage is needed when the collateral or security on real estate notes is actual property. The lender can that real property, sell it and use the proceeds so that the debt can be relieved if the borrower defaults on the loan.
Documents which are legal and binding and are specific to real estate are called tax lien certificates. These are obligatory taxes which every owner should pay and are given to people who pay the taxes of a piece of property in lieu or the current owner of the land. Tax lien certificates are issued to those who pay on behalf of the current owners and this becomes proof of their investment.
Business Cash Flow Notes
A particular business has secured these cash notes using assets that are owned by a bad business. These notes are considered a typical one in which an expert who is capable in helping the repayment of the borrowed money is called for advice. The several types of business cash flow letters include factoring, seller carry back notes, or purchase order funding.
Structured Settlement Notes
Individuals who won a settlement in compensation from a corporation or individual for an injury which was caused by negligence are given structured settlement notes. The insurance companies offer this as the annuity payment. These payments are given over a specific period of time rather than one lump sum payment. With this compensation, the victim can recover from a critical state of health. Selling a part or all of their settlement to a private investor is one way individuals can get a lump sum.