Who is involved
A private loan may involve the lender, the borrower, an attorney for one or both parties, and sometimes a title company or escrow officer. The documents may be drafted by the lender's attorney rather than generated by large loan software.
The signing agent is brought in to meet the borrower and notarize, in the same neutral role used in other loan signings.
Typical documents
Expect a promissory note, a mortgage or deed of trust, a personal repayment promise from the owner in some cases, an assignment of rents, a business-purpose statement and closing instructions. Entities may also sign resolutions or certificates showing who has authority.
Because these are drafted individually, page layouts vary. Careful agents read signature blocks and certificates closely.
What is different from a bank loan
Some federal consumer disclosures apply to residential bank loans but may not apply to business-purpose loans. Whether a rescission period or specific disclosures are required depends on the loan, and the lender's attorney should know. A notary cannot decide this.
Terms can include higher rates, short maturities and balloon payments, so the borrower should understand them before signing.
Entity borrowers and personal backers
If the borrower is an LLC or corporation, the person signing must do so in the right capacity, such as manager or member, and the document should show it. Identification is still personal. A notary verifies the individual, not the company.
See the separate guides on signing for companies and trusts for how that affects acknowledgments.
Preparing for a smooth closing
Confirm exact names, entity details and the signature format with the lender ahead of time. Bring ID for every signer and confirm funds instructions by phone. If you need a private lender signing handled by a mobile notary, MCC Solutions can coordinate it; the lender or attorney still supplies and explains the documents.
Questions both sides should settle first and records after closing
Who prepares the documents, and who explains them? Is a title search being done? Will the lien be recorded, and who pays? What happens on default, and in which court? Is the loan for business or personal use? The answers affect which rules apply.
A notary does not answer these. Their role is to confirm identity and complete the certificates properly.
Keep the executed note, the recorded security instrument, proof of insurance, payment history and any extensions in one file. A lender who services the loan personally should issue receipts and year-end statements. When the loan is paid, the lender signs a release that gets recorded, and the borrower should keep a copy.
Private lenders sometimes work with borrowers who plan to renovate and sell quickly, so the loan term may be short and the payoff date firm. Know your exit plan before signing: how you will repay, what happens if a sale takes longer, and what extension costs are. Ask your own attorney to review the documents. The notary cannot tell you whether the terms are reasonable.
Common questions
Can a notary witness a private loan between family members?
A notary can notarize signatures on loan documents. Whether the terms are suitable is for the parties and their attorneys.
Is a private lender signing handled differently by the notary?
The notarial steps are the same: identify the signer and complete the certificate. The documents are simply less standardized.
Do private loans require recording?
Secured loans are often recorded so the lien is public. The lender or its attorney decides.
More notary guides
- Refinance Signing: Your Three-Day Right to Cancel
- Name Mismatch Between ID and Documents: What Happens
- Loan Signing Agent Credentials: Background Checks and Training
This guide is general information, not legal advice. Fees and procedures change; check with the office involved or an attorney for your situation.