Private Financing

Private Financing



Private Financing
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:
www.rocklandcommercial.com
www.interestratepolice.com
www.californiaprivatemoneyloan.com




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