subject: What Are The Requirements To Advertise To Private Lenders? [print this page] Topic: What about advertising? Topic: What about advertising?
It's important to understand that each state sets its rules for advertising investment opportunities, which includes private lending. Every state has opportunities for you to advertise to bring in private lenders.
In the course materials prepared for you, you'll see this referred to as from 1-9 private lenders or the 3(H) exemption. In states where you can't advertise to this small number of private lenders, you should step up to the equivalent of a 6(A)2 (in Ohio that's 10-34 private lenders) or a 6(A)1 (35 and more private lenders). By doing this, most states will allow you to advertise to private lenders and grow your business.
Topic: What about advertising across state lines?
As you'll see in the course materials, this kind of approach is referred to as a Reg. D offering, and we suggest you use the approach under Rule 504 of Reg. D. If you're looking at using this approach to reach out to private lenders outside of your home state, it is possible to advertise to private lenders.
You would use a state exemption that allows you to advertise and only advertise to accredited investors. Accredited investors are defined elsewhere in this package of information. As a reminder, the Securities Act of 1933 has several definitions of accredited investors. The most important for your business are likely to be these two:
1.A natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase;
2.A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.
