Tennessee Private Money Lending:
Licensing, Compliance & Documents
By Anthony Geraci, Managing Partner & CEO, Geraci LLP | December 2025
Tennessee is a growing private money lending market, led by Nashville, Memphis, and Knoxville. Nashville in particular has experienced strong population and economic growth, driving active fix-and-flip and rental investment markets. Tennessee's fast non-judicial foreclosure and no redemption period make it an attractive state for private money lenders.
This guide covers the essential licensing, usury, foreclosure, and document requirements for private money lenders originating loans in Tennessee.
Tennessee at a Glance
Security Instrument: Deed of Trust
Foreclosure Type: Non-Judicial
Typical Foreclosure Timeline: approximately 45-60 days
Usury: Tennessee's general usury limit is 10% in the absence of a written agreement. For written agreements, the formula-based cap is generally 24% or 4 points above the average prime rate, whichever is less. Business-purpose loans and loans above certain thresholds have broader rate flexibility under Tennessee Code Section 47-14-103.
Related: Usury Laws by State | Deed of Trust vs. Mortgage Guide | How to Lend in Multiple States
Licensing Requirements
Tennessee requires licensing through the Tennessee Department of Financial Institutions for mortgage lenders and brokers making consumer loans. Private money lenders making business-purpose loans are generally not required to hold a state lending license.
Key Compliance Considerations
Tennessee has one of the fastest non-judicial foreclosure processes in the country. The trustee must publish notice for three consecutive weeks and mail notice to the borrower at least 20 days before the sale.
Tennessee does not provide a statutory right of redemption after a non-judicial foreclosure sale for deeds of trust. This makes Tennessee particularly efficient for lender enforcement.
Tennessee has specific requirements for the content of the deed of trust, including the power of sale clause and trustee designation.
The state allows deficiency judgments following foreclosure, giving lenders additional recourse beyond the property.
Document Requirements for Tennessee Private Money Loans
Tennessee private money loans require a deed of trust as the primary security instrument, along with a promissory note, loan agreement, personal guaranty (for entity borrowers), and state-specific disclosures and compliance riders. For fix-and-flip and construction loans, draw agreements, scope of work exhibits, and completion guarantees are also required.
Automate Loan Docs generates complete, Tennessee-specific document packages that comply with all applicable state requirements. Every template is drafted by the attorneys at Geraci LLP, whose team has over 30 years of combined experience advising private money lenders across all 50 states — including extensive experience with Tennessee lending transactions.
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