Posted by John Corey on March 18, 2006 at 06:39:21:
Both.
The name matters little in a credit decision.
The key factors are the credit history of the LLC and your credit history. The business plan. The track record and how that record is presented. The LTV and the actual cash you have in the company or in the deals.
Ed and others can comment further.
The banker does not want to lose money. That is even worse than not making money. Some banks focus on specific sectors.
John Corey
business name change to attract more credit - Posted by JamesS (oh)
Posted by JamesS (oh) on March 18, 2006 at 06:09:55:
I’ve had a LLC for several years called “xxxxxxx Properties” which I use to hold and flip properties. My buddy has a corporation called “xxxxxxx Home Improvement” which has been established for a shorter period.
He seems to get better opportunities from the banks as far as credit lines go. We both do the same thing for the most part.
One bank I approached turned me down saying in effect that they didn’t want to get involved with RE investors.
I was thinking of changing my companys name to something different in hopes of better luck. Am I crazy or desperate or both? Thanks to all!
Re: business name change to attract more credit - Posted by Ed Garcia
Posted by Ed Garcia on March 18, 2006 at 08:55:25:
James,
Name means nothing. As a matter of fact the edge would be in your favor because you?ve been in business for a longer period of time.
The answer is obviously one or several of the factors that I?m going to mention or a combination there of.
(1) PRESENTATION. Your friend may be making a better, more professional presentation.
(2) DEAL STRUCTURING. Your friend may be structuring his deals in a manner that is more digestible or compatible to the bank going back to presentation.
(3) Your friend may look better to the bank than you do, do to he may show more liquidity demonstrating to the bank that he has the ability to pay. Many of my students show to be ?asset rich and cash poor? and not as liquid as the bank would want so this can be adjusted before going to the bank for lines of credit.
(4) Selection of bank.
(5) Knowing how to Romance a bank.
(6) Building a relationship with a bank.
James there are other factors but these are the main focus points when dealing with a bank. Communication and learning the language is extremely important. As Zig Ziggler once said, ?She has a face that can make all time stand still? sounds pretty doesn?t it?
Or you can say ?She has a face that can stop a clock? so you see it?s that little bit of difference, that makes all the difference in the world.
Communication is the responsibility of the communicator,
Ed Garcia