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Private_Financing

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									Best 850 Finance PLR Articles: www.financeequityloans.com


Title:
Private Financing


Word Count:
560


Summary:
Non-Institutional Forms of Lenders and How Private Financing can be Achieved



Keywords:
Private Financing, Private Lending, Private Loans, Private Money



Article Body:
Private financing options are available for personal, investment, and commercial purposes. Private financing
simply means you are not dealing with a traditional bank. Private financing can be obtained from private
parties who are also known as Angel Investors, hard money lenders, private equity investors, investment
groups, or venture capitalists.


Angel investors make up the largest and the most flexible group of private financing options. Angel
investors may be relatives, friends, colleagues, or persons as yet unknown to you. If your scope of
acquaintances does not yield suitable private financing, spread the word about your project among all of the
above, as well as bankers, brokers, business development groups, etc. The right angel investor will for
private financing will probably be someone who has some knowledge of your industry. Angel investors may
provide a simply loan, repayable with interest and possibly points and a prepayment fee. Alternatively, they
may want to take an equity position with your company, taking stock in combination with or instead of
interest on the private financing they offer you.


Private equity lenders, aka venture capital firms, can be thought of as a group of Angel Investors providing
private financing as a group. Venture capital firms sometimes offer incubators: office suites in which their
darling companies (for whom they provide private financing) are housed, watched over, and assisted
through the early stages of development. To give private financing groups the returns that their investors are
looking for, private equity lenders always want a piece of the action. In exchange for the private financing
they offer, private equity lenders take an equity position in your company through stock or some other
means and become your financial partner.


Private financing obtained in exchange for stock can be an excellent way to get the initial operating capital
needed to start a business, but it can be extremely expensive on the far end. While you will likely not be
paying interest in the early stages of your business, you will pay dearly should you become a success.


If you have real estate to collateralize, you may be able to obtain private financing without having to give
away an equity position (and a place on your Board, control of your business decisions and all that comes
with having a financial partner) by working with a hard money lender. Naturally, hard money lenders can
provide financing for real estate investment projects, land acquisitions, and construction projects. But, by
collateralizing real estate you already own, you may be able to obtain private financing for purposes
completely unrelated to real estate. When it comes to hard money private financing, the use of funds is not
as important as a clear indication of how the loan will be paid back. Naturally, if you are unable to repay the
loan, the real estate collateralized by this kind of private financing will be sold off by the private financing
lender, just as traditional banks foreclose on homes when you cannot pay the mortgage.


Regardless of the path you choose in obtaining private financing, you will find private financing companies
are more flexible in lending criteria than banks, SBA, or similar traditional lending institutions. Check out
private financing companies and brokers online to see which will suit your business needs most effectively.


Recommended Sources of Private Financing:
http://www.rocklandcommercial.com
http://www.interestratepolice.com
http://www.californiaprivatemoneyloan.com




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