The first way to get a private investor loan is to approach a loan broker that maintains an extensive stable of financiers that provide capital to small businesses that are in need of a debt obligation. However, you should be aware the costs of the loan as well as working with a brokerage are extremely high. You can anticipate that a business loan brokerage will charge you a fee of 2% to 3% of the loan amount. Additionally, the interest rate associated with this investment will range from 9% to 25% per year. One of the ways that you can effectively reduce a private investor loan cost is by offering a small percentage of your business so that this financier becomes a partner in your business. As such, they will reduce the interest rate associated with the loan as they will be concerned regarding the profitability of your business.

One of the other ways that you can obtain a private investor loan is to work with your certified public accountant. Much like a commercial investment broker, a CPA has a number of contacts in the local business community. Many of these individual lenders often approach their accountants in order to find strong local investments for both debt and equity capital purposes. This method of raising capital is often overlooked, but it is a very inexpensive way of going through the capital raising process. Additionally, your CPA may be able to provide you with additional advice as it relates to other ways in which you can get the capital that you need for your small business. In most circumstances, a CPA will provide this assistance to you as a professional courtesy. These firms do not typically charge fees for this service.

The final way to obtain a private investor loan is to go onto the Internet. There are a number of popular websites, such as Prosper.com, that allow individual investors to directly place capital with a business at a reasonable interest rate. However, you need to be very careful as it relates to raising capital in this manner. Since you are seeking a loan specifically for a business, you should not give up pertinent personal information such as your social security number. Additionally, you should note that many websites dedicated to private lending are actually portals that send leads to investors. In many of our future articles, we are going to continue to discuss ways to find private financing for your small business.

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