private borrowing question: re non-accredited lenders

[Curt Smith]

Greetings, I've bought Alan Cowgill's private borrowing course but I must have fallen asleep when the topic of non-accredited lenders came up.

I plan on registering with my state, GA, and Fed SEC so I can advertise and borrow from strangers in other states. How am I limited when registered to borrow from little old ladies who only have $500k to their name and they want to lend me $100k and I don't know this person?

I could stretch out the relationship and have 3 meetings exceeding 1 month and then they'd be in the "Associates" bucket. Does this alone allow me to borrow from non-accredited lenders?\

Thanks, curt

[Ned Carey]

If you register with the Federal SEC you are not limited. However that process is too long and expensive. It is not a practical option.

Most people go with state or federal exemptions to registering. I don't know GA law so I will ignore state issues. A fed exemption means you need t use a Private placement doc. which will cost $3K to $50K. Probably most typically $7-15K.

On the fed level an exemption still prohibits "general Solicitation" (ie: advertising). And using someone who is not "accredited" but is "sophisticated" (which is not defined) will increase the cost of your private placement.

I assume your "3 meetings" and "Associates" terms are coming from GA state law. There is nothing in Federal SEC rules using these terms.

Alan Cowgill has spread a lot of misunderstanding of securities law.