Private Lenders
Private lenders offer an alternate type of financing for those who have been turned down for a commercial loan through traditional methods. Private lenders are willing to sit down and discuss your business plan with an open mind regarding such financing. While private lenders will require most of the same information as a commercial lender, they will go more in depth with your business plan. It is important that your plan discusses contingency scenarios, realistic forecasts, and long term plans. While they want to see your confidence in your business plan, they also want realistic answers to how you are going to handle various issues that may arise.
Private lenders are more willing to take a financial risk than commercial lenders. They clearly understand that you often have to take risks to find out if something can be successful. In addition, they are more creative with repayment structures. They often manipulate what is available to fit your needs, rather than you having to adjust your business plan to meet theirs.
However, there are those loans that they just can’t say yes to. In that case, they help you search for alternatives such as bringing in a co-signer with a good credit history or finding investors to help fund the capital needed.
There are many private lenders out there. You can obtain information on those in your area by asking your local bank, searching online, or contacting the Better Business Bureau. If you have been turned down by a commercial lender, take a shot at a private lender. You will likely pay a slightly higher interest rate because of the risk of your investment, but you will get the opportunity to be successful. So often, we just need someone to help us get our foot in the door. This type of lending could be your ticket!
