How to Approach Private Lending

1. Find a Lender /Borrower
Private lending has experienced an explosion of growth due to many of today's economic factors.

Borrowers: Banks and commercial lending houses have tightened requirements and are declining normally acceptable risk loans. Borrowing money from someone you know makes a lot of sense!

Potential Lenders: These are people that have established themselves and are in a position to loan money. They also may find that the interest rates they are being offered by banks in the form of CD's and other investment vehicles too low. Usually this is someone you know and wants to see you succeed.

2. Agree on Loan Terms
Pick and agree on the loan terms you will use. Standard terms include:
• Loan amount
• Interest rate
• Term
• Repayment type
• Repayment frequency
Interest rates vary, so use our Resource Center to help you choose. You and your lender should discuss the alternatives that you each have and agree on the rate that provides a win-win situation for you both.
3. Create Formal Documents
Approach your lending relationship in a professional manner. Introduce a neutral "third party" that can help eliminate the emotions from the transaction.

You will need a promissory note to document the loan.

The Agreement Builder™ will guide you through the process of creating a professional Promissory Note. You input the amount of the loan, interest rate, repayment terms (months/years), due dates and any special conditions and The Agreement Builder™ creates a legally binding promissory note.
4. Set up a Repayment Plan
One2One's Agreement Builder™ generates a list of due dates and payment amounts ($) that make up your repayment schedule for your loan agreement.

The Borrower must remember to send a check in advance of each due date. There is usually no "payment book" or monthly invoice that is created by the Lender. You can also have an accountant or private lending company service your loan.

Remove the on-going, potentially emotional hassel: have One2One Lending send e-mail payment reminders to the Borrower on behalf of the Lender. Stick to your loan agreement!