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A promissory note is a document outlining borrowed money and its repayment terms, categorized into two types: secured and unsecured. A secured promissory note allows the lender to claim an asset if the borrower fails to repay, while an unsecured note does not offer this security, requiring the lender to pursue legal action for repayment. Promissory notes provide advantages such as guaranteed payment, marketability, and legal certainty as defined by the Uniform Commercial Code (UCC). Key UCC requirements include an unconditional obligation to pay and a specified repayment timeline, resulting in lower risk regarding the amount owed and facilitating easier transferability and negotiation.