subject: Private Money Lenders: Alternative Funding Opportunity [print this page] Private Money Lenders are private organizations or individual investors who offer personal loan to anyone who desires to increase their financial needs. They can also be middle man organizations that will get you to an individual investor and are a non-traditional lender that provides you with a real estate loan, secured by property and not by you. These private money lenders can give you capital money for your start up business or just to assist with your other financial needs in running your business. However, most of these private lenders engage in risky venture since they understand both the risk and opportunity associated with selected business types or market segments. They will also finance projects the banks will reject. They also require fewer document that a mortgage broker, banks, credit unions and other non-private lenders would request for you to obtain.
Things youll need:
* Proof of income
* Bank account
* Credit history
When it comes to small business financing, private money lenders are looking for the similar information and will make a due diligence like the banks in making a funding decision. They are looking for good business ideas, with an airtight business proposal, that includes contingency scenarios and realistic forecasts, supported by skilled and professional people with some financial stake in the business. Private lenders are more concerned regarding the property and not regarding you as a person. They are not concerned regarding the credit rating as well. They are also called hard money investor and the profit when buying property, commercial property, to small business financing is, instead of bank financing or if you buy a contract that is worth 65% or less of the after-repaired value of property, you can get into the transaction for no money down. This is where private lenders are not concerned about your credit rating, but more concerned of the property. Hard money interest rates can range anywhere from 12% to 20%. The lender also charges points (1% of the loan amount that is commonly financed into the agreement), ranging anywhere from 1 to 5 points.
How are you going to locate these Private money lenders for personal loans?
* Several online organizations have websites that permit people to apply for a personal loan and for private individuals to lend their money. The person who is taking the loan will be accountable to pay back the money with interest directly to the lender. Although, there are risks involved if you opt to work with private money lenders, so it is imperative that you do more inquiries regarding a private lending business to avoid getting into complications in the end.
* Research the organizations that you are interested in using to find a private lender. You need to see the Exchange Commission and U.S. Securities to know if the company is registered since reputable institutions should be registered with the SEC. You should also check if there are any complaints regarding the person-to-person lending company in the Better Business Bureau.
* Search your local phone book for private money lenders. You may see them listed in the investment or bank section of your town or citys Yellow Pages. You may also look online for some localized search engines, like Yahoo and Google Local.
