The paper said the deal would likely be structured as a convertible preferred security that could ultimately turn into common stock in the Swiss-based company.
U.S. private-equity firm First Reserve Corp plans to invest about $1 billion in the world second-largest independent oil trader and will lead a group that includes mutual funds and other energy-focused funds, the people told the paper.
First Reserve and Glencore could not be immediately reached for comment by Reuters outside regular office hours.
In August, London's Independent newspaper reported a mining source as saying Glencore is looking to raise between $1 billion and $1.5 billion.
The loans would then be converted to equity at the time of a probable flotation in 2012, the newspaper said.
In June, bankers familiar with Glencore's thinking told Reuters that any public listing was likely to be years away. [ID:nSP449365] (Reporting by Ajay Kamalakaran in Bangalore; Editing by Anshuman Daga)