Posted by TRandle on March 07, 2001 at 17:45:45:
Eric,
Bank One didn’t ask for a purpose, at least that I recall. We have several LOC’s with more than one institution and a “purpose” never posed a problem. It’s not much different than a credit card, revolving debt and all, except for the lower rate and omission of advance fees. If they haven’t pulled your credit, or even if they have, perhaps you’re best served elsewhere. Hope that helps…
stupid LOC question - Posted by eric-fl
Posted by eric-fl on March 06, 2001 at 10:39:23:
I am going to see if I can get an unsecured LOC from a bank. I’m having a little trouble coming up with an answer to one anticipated question - “What do you intend to use the money for?” I’m thinking that “Well, I plan to use the money to purchase discounted secondary equity positions on properties that I intend to purchase subject to the underlying financing, through the use of a land trust and subsequent assignment of benefical interest, so that I can then turn around and resell them on an installment land contract”, might not be the best answer.
What are some typical uses for an unsecured LOC that a bank likes to see? Home improvements? I’m concerned that if I denote that this would be operating capital for a business, that would trigger a request for a business plan, which I can furnish, but I’m thinking that puts me back in the same position as above. Are there any non-real estate reasons a bank might like to hear?
Re: stupid LOC question - Posted by Surfdog
Posted by Surfdog on March 09, 2001 at 24:25:11:
If you have been operating for a while, & have a number of successes to point to, preparing a business plan with the theme of say, renovating houses and offering them for subsequent resale (or whatever you typically do) would likely go along way in persuading the bank to offer you a LOC.Just make sure you have a sensible business model.