Private Debt Investing with an Equity Trust Self-Directed IRA: Frequently Asked Questions

Q: How do I request to purchase a note in my Equity Trust self-directed account?

A: The easiest way to request to make an investment in Private Debt is to complete the Private Debt Wizard. (Clients: log into myEQUITY.com, navigate to Investments>Private Debt.) The online wizard walks through all the instructions to direct the investment that will be made within your account.

Before you begin the wizard, please be prepared to provide:

• Loan amount or remaining principal
• Borrower’s name and contact information
• Collateral details (if the note is secured)

Be sure you have enough available funds in your account for the transaction. You can check available funds using myEQUITY.

Q: How should my private debt investment be titled?

A: When your account is the only owner, the investment should be titled:

Equity Trust Company Custodian FBO [Account Owner’s Name] [Account Type (IRA, HSA, CESA, etc.)].

The complete Investment Titling Guide can be found in myEQUITY under Resources>Education>Private Debt.

Watch: Client Greg discusses diversifying with notes and real estate in an IRA

Q: What supporting documents may be needed to complete my investment?

A: Private debt investments require a copy of the note to be submitted with the Direction of Investment. In addition, you may be required to submit documents including:

• Assignment of Note and Assignment of Collateral (if purchasing an existing note)
• Collateral Document
• Filed Articles (if loaning funds to a company)

[Read More: What is Promissory Note Investing?]

Q: What is required to be included in the terms of the note?

A: Note terms and conditions will vary based on the agreements within the note.

All notes must include:

• Face value
• Interest rate or flat fee amount
• Maturity date
• Repayment terms, which may include:
  • Periodic payment amounts
  • Balloon payment amount
  • Payment dates

Q: How do I manage payments received from the borrower after my purchase is complete?

A: Your borrowers may send payments directly to Equity Trust to be deposited into your account via direct debits from their checking or savings account. Online payments may be set up as one-time or recurring. Visit our Online Payment Center to learn more.

To deposit income yourself, send the check or wire made payable to your account with a Deposit Coupon.

If your account has partial ownership of an asset, you should only submit payments based on your percentage of ownership of the asset.

Q: Can I read an example of a real-life private debt investment?

A: Read about Guy, a Georgia investor who earned a 10-percent return on his hands-off, self-directed note investment.

Learn more: Private Lending with a Self-Directed IRA video

If you have additional questions about the private lending process at Equity Trust or getting started with a self-directed IRA, request a consultation today.