Private Money Lenders are private organizations or individual investors who provide personal loan to anyone who wishes to extend their financial needs. They can also be middle man companies 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. Private moneylender can give you money for a start up business that needs capital to get the business up and running or if you have a unique borrowing circumstances, they can aid and could make a lot of sense. However, most of these private lenders engage in risky venture since they know both the risk and opportunity associated with selected business types or market segments. They will also finance projects the banks will decline. They also require less document that a mortgage broker, banks, credit unions and other non-private lenders would request for you to acquire.
Things that you will need:
* Proof of income
* Bank account
* Credit history
When it comes to small business financing, private money lenders are searching for the same information and will make a due diligence like the banks in making a financial support decision. They are searching for good business ideas, with an solid business plan, that includes contingency scenarios and reasonable forecasts, backed by experienced and professional people with some monetary stake in the business. Private lenders are more concerned concerning 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 advantage when purchasing property, commercial property, to small business financing is, instead of bank financing or if you buy a agreement that is worth 65% or less of the after-repaired value of property, you can get into the contract for no money down. This is where private lenders are not concerned concerning 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 find these Private money lenders for personal loans?
* Several online organizations have websites that permit people to request 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 decide to work with private money lenders, so it is imperative that you do more inquiries concerning a private lending company 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 companies 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.
* Look for your local phone book for private moneylender. You may find them listed in the investment or bank section of your town or city’s Yellow Pages. You may also search online for some localized search engines, like Yahoo and Google Local.