Private funds account for the majority of the loans made in the United States each year. These are funds available in the private market without government support or guarantee. There are many private funding sources for businesses out there.
Private funds in the form of loans can sometimes be an effective strategy for a business which is in need of financing. Businesses struggle with getting a loan from a bank, so they have to look for other financing options. If you don’t want to give up control of your business to a potential investor, than private lending is probably good for your business if you can’t get financed through a more regular lending institution.
Since this approach may not always work out for your business make sure you are working to get your business financial situation in line. This means your business should have its own credit score now that is different than your personal credit score. Many times entrepreneurs try to get business loans on personal credit scores.
Not only is it difficult to get financing for your business this way, but it can also put you and your family in a tough situation if the business were to go bankrupt or something of that nature. Make sure you separate your personal and business credit before getting too far in the loan process.
We have over 4,000 lenders and investors who are eager to lend your business some private funds. You can search our directory completely free of charge with no obligation.