Business Line of credit - Posted by Deon

Posted by CPO on July 28, 2003 at 15:14:37:

Think about it for a minute. Do you think banks are totally stupid. Who is behind the Corp? Of course they want to know who they are extending credit to.

Business Line of credit - Posted by Deon

Posted by Deon on July 27, 2003 at 13:32:05:

I would like to obtain a business line of credit. we started our company about 6 months ago, and we want to use that line of credit to buy rehab and sell properties. does anyone here know how difficult or what type of red tape we would have to deal with?length of time we’ve owned the business? any information would be greatly appreciated!

NABL - Posted by Sandy (NY)

Posted by Sandy (NY) on July 29, 2003 at 04:17:18:

I was thinking of joining the National Association of Business Leaders. If you pay to join, you can get a 30k LOC for you business without your personal credit being checked and a whole bunch of other support to help you run your business.

I researched them and they seem legit. What does everyone/anyone think? Does anyone on the board have any experience with or advice about them?

Thanks in advance for the info.


My Experience with Business Credit Cards - Posted by Frank Chin

Posted by Frank Chin on July 28, 2003 at 14:28:10:

Hi Deon:

I have several business entities, and was pleased to receive credit card offers from many different banks, “Capital One” being the most active.

Then, I own a business where I receive payments from major credit cards - a growing number of which are “business credit cards”.

I was shocked to be assessed “special charges” for MasterCard and Visa beyond the quoted 1.75% discount. I called my bank to find out what they are.

The bank advises me that they collect a surcharge for “business credit cards” of from 2% to 3.5% in addition to the 1.75%, explaining that business cards carry higher risks.

It would seem to me that the Banks are extending credit to “newbie businesses” with me subsidizing the risk. If its based on the “individual’s credit”, I would say I’ve been ripped off.

Unfortunately for me, I can’t surcharge the customer if they present me with a “business credit card” as I usually don’t know how the customer is paying till he whips out his card, and its illegal for me to charge more once the sale is rung up.

Bottom line, I hope they’re extending credit to the businesses, particularly if the risks are already passed on to the merchants.

Frank Chin

Re: Business Line of credit - Posted by Sal

Posted by Sal on July 27, 2003 at 17:20:38:


May want to try with a savings secured loan at the bank you are working with. After a period of time, you build the line of credit w/o all the hassles. Do this with more than one bank. Stir up the competition a bit.
As suggested, your lines of equity will build with your properties and you could use these as collateral. Be sure you ask for “substitution of collateral” clause.


Re: Business Line of credit - Posted by IB (NJ)

Posted by IB (NJ) on July 27, 2003 at 14:28:56:

Attended creonline’s Lender’s Workshop in ATL last November where you learn alot about LOC’s. The more practical way to start out is via secured or HELOC’s where the equity in the real estate is borrowed against. After using this for a while (maybe 6 mos. to 2 years while increasing the line as you increase the equity in your properties) you should be able to convert to an unsecured LOC (WLOC). At least that’s my plan. In the meantime, HML’s and private investors may be the way to go.

You should also post your question in the Finance forum moderated by the Great Ed Garcia

Re: Business Line of credit - Posted by Investor-Rama

Posted by Investor-Rama on July 27, 2003 at 13:55:01:

I can tell you the mess I have been dealing with.

I have an LLC for real estate. It is me and the wife as owners. Both our credit scores are in the mid 700’s. Debt/Income ratio is lowwww…

I got a Capital One card quite easy…got a flyer in the mail, and got 5k in the biz name, no problem…which is great!

Now the not so great. I opened up a biz checking with a local bank for no fees(which is great!!) and tried to get a LOC for the biz at a mere 25k…didnt think that was too out of line…

Man they need so much documentation, it is going on 2 months now… they wanted a biz plan, 3 years back taxes, organization papers etc…and dang if I cant get it perfect. It is almost not worth the hassle, I would rather find private/HML’s and skip the loops…then when I get 5 properties/rehabs under my belt try and go to a bank for a commercial credit line.

What I want is to get a line that is flexible and large enough where I can get the deal done over the weekend…but still gotta earn my stripes first I imagine.

Anyone else with ideas? I have perfect personal credit, have some cash, lots of credit lines personally etc…in the same boat, and hoping to get some results soon…

Did You Read the $30,000 Credit Line - Posted by Randy

Posted by Randy on August 01, 2003 at 09:01:13:

This has No Value as it relates to a company having the ability to get mortgage loans? Lenders don?t make mortgage loans to companies or corporations (only live warm breathing people)

?As a member, you are approved for a $30,000 guaranteed, unsecured business line of credit. This enables you to select from among thousands of items in our business and consumer catalogs-- computers, fax machines, office products and furniture, consumer electronics and products-- and charge a portion of your purchase (up to $30,000) at a reasonable 14% APR. Once you have established an adequate payment history, the initial 50% down payment required will be waived.?

You will pay dearly for the LOC?

Re: My Experience with Business Credit Cards - Posted by Rob Ricker

Posted by Rob Ricker on July 28, 2003 at 23:27:33:

Very interesting Frank!
Thanks for sharing this info with us

Re: Business Line of credit - Posted by David T.

Posted by David T. on July 27, 2003 at 17:07:04:

At least you have a credit card under your business name. I can’t even get that!!! I opened a LLC in June. Single Member.

Re: Business Line of credit - Posted by Investor-Rama

Posted by Investor-Rama on July 27, 2003 at 17:26:26:

Give yourself a few months, the offers will start coming. Also from Chase…it takes them a little while to get your info.

Its only 5k, I would never even sniff at an offer like that on my personal credit. Min for myself is 10-15k…

Re: Business Line of credit - Posted by David T.

Posted by David T. on July 27, 2003 at 17:38:06:

I beg to differ:

If you show -0 cash flow under your EIN,(no credit file)because you just open an LLC in June, You will NOT GET A CREDIT CARD UNDER YOUR BUSINESS. YOU CAN ONLY GET UNSECURED CREDIT UNDER YOUR PERSONAL NAME!!! What bank would lend you a BUSINESS credit w/ no cash flow? What if you go bankrupt under your LLC??? Who loses, THE BANK!!! However, you CAN get a visa check card under your commercial banking account. BIG DEAL!!!

Sorry for the frustration. I know you mean well and I thank you for it.

David - Posted by Investor-Rama

Posted by Investor-Rama on July 28, 2003 at 24:01:03:

As the other person said, you are wrong.

My LLC has been open for about 4 months, and I have a card with Cap 1 for 5k. In addition I have an app in with GM. I am sure I will get that too.

I would be careful being so negative and strong with your opinion. I have business credit (only in my LLC name) and I know for a fact that I will get more.

What I am finding is if the person behind the corp has good numbers, the bank seems to be more willing to give credit. I just have to prove my personal past, but am confident in getting my 25k line.

That is my experience…


Your Wrong !!! - Posted by Rob Ricker

Posted by Rob Ricker on July 27, 2003 at 18:47:41:

I started a Corporation and have done absolutely nothing with it, yet I received a $2,000 line with Capital One. Several other offers as well. Maybe I was lucky, but that’s my experience.

Re: David - Posted by Ben (FL)

Posted by Ben (FL) on July 28, 2003 at 10:09:21:

On your application, did you put your SS# or the EIN of the LLC?

Re: Your Wrong !!! - Posted by ray smith

Posted by ray smith on July 28, 2003 at 13:09:14:

I was thinking about starting a corporation also because my personal credit is shot. My question to you is did you have to use any of your personal information to obtain those credit cards that you have gotten?..or did you just use your Corporate info only? If so how did you go about applying for the corporate credit? and was it hard getting your corporation established?

Re: David - Posted by Investor-Rama

Posted by Investor-Rama on July 28, 2003 at 10:45:30:

The corp EIN, I know why you asked that too…lol

If I had put my SS#, I sure wouldnt have allowed 5k line on my credit. If I have an entry on my report, it wont be for a 5k CC

Re: Your Wrong !!! - Posted by Rob Ricker

Posted by Rob Ricker on July 28, 2003 at 23:23:40:

I did have to give my personal info as an officer of the company. If the bill doesn’t get paid, I’m sure they’ll come looking for me. My personal credit is good, so maybe that helped. What was important to me is that the credit is not included on my personal credit report and I’m building up a credit report for my corp.