Advice for Doing Private Lending

[Benjamin Lioue]

I am doing a private unsecured loan of $10K at 11% to a real estate development firm. I have received personal guarantees from the 3 individuals whom make up this firm as well as added on the insurance (except life). Questions to follow:

1. What are your look to Due Diligence Documents you want to get comfortable lending?
2. What type of recourse do I have if the firm can't pay up?
3. If a third party is originating the loan document, should I still have a lawyer review it?
4. If I need a lawyer, what type of lawyer should I get? Lending lawyer? Real Estate lawyer? Or is a deal this size too small or worth it for me to get one. 
5. Is it worth asking what my money will be used for?

Thanks,

Benjamin

[Chris Mason]

$11k & unsecured? 

I'd want to know why they can't just go get a loan from a bank, or each of the three request a $4k credit card limit increase, first and foremost. A "real estate development firm" that can't find access to $10k seems off to me.

Moving on from those initial red flags...

Are you doing this to test the waters, or for the ROI on $10k? If testing the waters or returning a favor for a relationship, maybe I could see the logic. If for the money, I can't imagine ROI on $10k @ 11% is even worth your time.