
A demand loan is a loan in which the Lender can require the full repayment of the loan by the Borrower at any time during the loan term.
A demand loan can be used in many different types of loans and loan structures. It is outlined in a promissory note, which is a simple document that states the Loan Amount Principal, Interest Rate, and other terms. The interest rate is normally a variable rate based on the current prime rate plus a percentage.
The loan may be secured or unsecured. It can be applied to all types of business loans.