Unsecured business loan

[Vikram C.]

I need some help with figuring out the appropriate interest rate on an unsecured business loan for flipping.

For a secured business loan from a hard money lender, it seems the going rate is around 18% per year with the property as collateral and the borrower contributing around 20% to 30% of the capital.

And some "lenders" who are willing to put all or almost all of the money have a profit share arrangement in lieu of interest.

Wells Fargo seems to have personal loan rates of around 22% in Arizona.

So what about a lender who wishes to simply lend on an unsecured basis? The lender is willing to lend up to 80% of the cost. (I know you will say that the lender should not lend without security but there is a specific reason for this situation.)

The lender in this case is actually a relative of mine so the negotiations are a little delicate where neither party wants to hard-ball the other and yet both parties want to be fair. The borrower is going to be my new LLC in Arizona.