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General Guidelines
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The promise to pay usually includes a principal amount, an interest
rate, a maturity date (when payments cease and the note becomes
due), and provisions dealing with default and state of governance
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Be sure to name your IRA as the lender (e.g., “PENSCO Trust
Company Custodian FBO “Your Full Name”, IRA or SEP IRA, etc.,
Acct. No.____”).
Required Documentation for an IRA lending to an Individual
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PENSCO
Trust’s Unsecured Note Authorization Form
This form is helps you summarize the information contained
in your actual note. Click
here for the checklist of required documents.
- PENSCO
Trust’s Investment Authorization Form for Non-Publicly Traded Investments
This form authorizes the funding of your note by indicating the
exact dollar amount that will be sent out, and the delivery method
(e.g., wire, check mailed to a particular address, etc.)
- PENSCO
Trust’s Loan Servicing Form
This form is where you indicate who or what firm will be servicing
your note. PENSCO Trust does not service notes, which means that
we do not collect from borrowers. This means, we do receive the
borrowers payments, and we apply them to your IRA as indicated,
but we do not proactively collect (i.e. chase) late payments,
or calculate amortization if necessary. You may perform the function
personally as long as you do not accept loan payments personally
(i.e. you could receive the checks in the mail, add necessary
notation, and forward to PENSCO Trust for deposit. If you feel
you need this service performed for you, we can supply referrals
to firms that provide note servicing, or you can obtain your own
note-servicing firm.
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Original Note
You must have the borrower’s signature notarized on both the form
and the note. We will also need to know the borrower’s address,
social security number, and birth date.
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Additional Required Documentation for an IRA lending to an
Entity
When you are investing with your IRA in an unsecured note issued
by an entity (e.g., a corporation), you will need to supply us
with items 1-4 above, as well as information about the entity.
The documents required for each type of entity are outlined by
type in our Private
Investment Guidelines. Please submit (or have the borrowing
entity submit) these documents along with items 1-4 above.
Notes before Submitting Your Investment Authorization to PENSCO
Trust
IRA Owner must read, approve, and pre-sign all documents before
submitting to PENSCO Trust for the final custodial signatures. PENSCO
Trust signs as your IRA (the lender). However, we cannot sign until
the IRA Owner has already pre-signed or initialed beside all signature
lines. Funding Once you send in the forms and documents mentioned
above, we will fund the borrower in the manner you specify on the
Investment Authorization form in return for the original signed note.
We generally require that an intermediary escrow agent act as the
exchange agent. You should, therefore, contact us to discuss your
particular circumstances (contact info below). Once we have available
funds in your IRA and have received completed paperwork, we shall
be able to fund your loan investment within 24-48 hours.
Post Funding
PENSCO Trust will hold the note in our vault and accept payments to
your IRA as they are made. All income and expenses must flow directly
between the borrower and PENSCO Trust as your IRA custodian.
Contact Client Services:
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