Private money lenders typically focus on providing continuous finance to small businesses to generate a recurring stream of income from the interest payments that you will be required to make as a small business owner. When working with private money lenders Florida, you will undoubtedly be required to produce a business plan that focuses on what you intend to do with the funding you seek. This topic is usually given its chapter in most company plans.
Suppose you do not know how to correctly put together a document suitable for this type of outside funding source. In that case, you should consult with a certified public accountant so that you can submit documents demonstrating why you are a reasonable investment risk. Most hard money lenders Florida impose interest rates comparable to credit card rates. If you cannot obtain standard credit, visiting a private lender may be in your best interests. However, if you can secure financing without turning to private investors, it may be to your best advantage to do so first.
Traditional bank funding, Small Business Administration loans, and obtaining funds from friends and family are all viable options for dealing with private lenders. However, like with all types of capital covered in earlier articles, one must address several considerations before dealing with an outside funding source. Returning to the cost of a private money lender indicated before, you can expect annualized interest rates ranging from 10% to 20%. If you have a substantial amount of collateral, the interest rate will most likely be substantially lower than if you were looking for an unsecured loan. The more security you can provide to a possible private lender, the more likely you will receive the finance you require.
Furthermore, suppose you can demonstrate that your company has a long operational history and is now profitable. In that case, you will be able to decrease the charges associated with the credit facility even further. We will continue to discuss how you might access company funding through private lenders on an ongoing basis as your business grows in many of our future discussions.