Legal Question in Business Law in Illinois

Re: equitable agreement

I am not sure what you mean by an "equitable agreement". Normally, someone loaning money to another person or business gets a Promissory Note. There are many flavors of notes and many different provisions based upon when principal and interest payments are due (demand notes, installment notes, term notes), whether the payment is secured by a lien on the borrower's assets, whether there is a guaranty by a third party (such as the shareholder of an incorporated business or a member of a limited liability company), etc... Notes can also be negotiable or non-negotiable (which is too complicated to explain in a short post)

Sometimes all of the terms are in the Promissory Note, but if the terms become lengthy, the commmon practice is to strip out many terms and put them in a note purchase agreement or loan agreement, and often a separate security agreement. There are many other potential provisions. In medium sized commercial loans, loan agreements can easily run over 50 pages.

In its most simple form, a note is a promise to pay a debt. Thus, the following is a note:

August 28, 2006.

I, Robert Jones, promise to pay Tom Smith on demand the sum of $1,000 plus interest of 8% per year, compounded annually, from the date of this note.

/s/ Robert Jones

I hope this helps.