Posted by Wayne-NC on September 30, 2005 at 09:41:09:
You confirmed my suspicions. I have so far avoided such loans due to their higher costs. Who is this credit union/bank? Maybe I can satisify some of their hunger?
Update: Business Line Of Credit w Wells Fargo - Posted by whyK-CA
Posted by whyK-CA on September 27, 2005 at 14:38:55:
Just to give you update on previous posts…The local banker took my apprecation over the phone for 100K and today it was approved…only for 20K. Well, well, it’s a start. And it feels good to have BLC.
The rest of the story - Posted by Wayne-NC
Posted by Wayne-NC on September 27, 2005 at 15:53:31:
What rate and terms did you get? Interest only payments? Variable interest rate? What is the rate tied too? Just comparing (or contrasting) to a HELOC.
Re: Update: Business Line Of Credit w Wells Fargo - Posted by Frank Chin
Posted by Frank Chin on September 27, 2005 at 15:13:32:
whyK:
Just curious. Did he ask you to fax over a copy of your “K-1”??
That’s how mine was arranged.
Frank Chin
Re: The rest of the story - Posted by whyK-CA
Posted by whyK-CA on September 27, 2005 at 17:00:53:
I was mainly interested in this for availability. I believe the interest rate was prime + 5%.
Now after I thought about this a little, I?m not sure if this is a good idea to open this account and getting only 20K. (They still need my one signature at the branch to finalize.) It is definitely not as attractive as it was when we were talking about 100K. At 20K, it is like having another credit card. Plus I have to think if 20K is worth risking the possible negative effect on my credit report.
On the other hand, maybe this is where I have to start to build a good relationship with the bank?
Any thoughts?
Re: Update: Business Line Of Credit w Wells Fargo - Posted by whyK-CA
Posted by whyK-CA on September 27, 2005 at 15:30:43:
Frank, No. They didn’t ask a thing.
Re: The rest of the story - Posted by Wayne-NC
Posted by Wayne-NC on September 28, 2005 at 08:53:24:
This loan can be a good idea if it is not tied to your personal credit report. I tried for several and they always wanted my personal guarantee. I wanted a BUSINESS loan secured by the full faith and credit on the business. If your need is availability, then there are less expensive avenues to go especially if you have to tie in your personal credit. HELOC’s are prime+.5 at 90%LTV up to $100K on investment property and without income verification. Any loan that you get is with full intention to pay back so don’t worry. I am sure that you are fiscally responsible. That will build a good relationship with any bank.
Re: The rest of the story - Posted by Natalie-VA
Posted by Natalie-VA on September 28, 2005 at 08:07:34:
WhyK-CA,
I would tell them that since your credit is good, they need to stand by their original offer or you are going elsewhere. As far as I’m concerned, it’s a form of bait and switch.
–Natalie
Re: Update: Business Line Of Credit w Wells Fargo - Posted by Nate
Posted by Nate on September 27, 2005 at 18:04:37:
I’m confused here. How can this be a BLOC of credit? You didn’t have to provide any docs at all. Plus if you do open this account it would not be tied to your personal credit history since its in your business name so it should not show up on your credit reports. Care to explain?
Nate-WI
Re: The rest of the story - Posted by Natalie-VA
Posted by Natalie-VA on September 30, 2005 at 07:43:06:
Hi Wayne,
As I wrote to JT below, I have given my personal guarantee numerous times, and it’s never showed on my credit report.
–Natalie
Re: The rest of the story - Posted by Dave T
Posted by Dave T on September 29, 2005 at 23:23:42:
It is my understanding that your business credit line does not appear on your personal credit report even though you personally guarantee the line.
Personal guarentee shows up on credit - Posted by JT-IN
Posted by JT-IN on September 27, 2005 at 21:24:21:
No doubt there is a pers guarantor required with this LOC… regardless of who the primary debtor is listed…
And personal guarentee’s do show up on a credit report, just the same as primary credit. My guess is that this LOC is underwritten based upon the guarentor’s FICO, and little more.
Re: The rest of the story - Posted by Wayne-NC
Posted by Wayne-NC on September 30, 2005 at 06:46:44:
I never really got a definitive answer from the CSR involved, possible because they only “sell” this money. When they ask me for my SS# and not my business tax ID and then ask to pull my personal credit, then that is a pretty good indication of where this credit line will appear. I just have to find a financial institution that will pull credit on the tax ID alone. A business is an entity in its’ own where I will not be personally responsible, to sue and be sued, sign for credit, etc. If I can do that, then my understanding will equal yours.
Mine doesn’t - Posted by Natalie-VA
Posted by Natalie-VA on September 30, 2005 at 07:41:27:
Hi JT,
I have personally guaranteed dozens of mortgage loans in either my LLC or S-Corp’s name and none of them have showed on my personal credit. I also have a business MasterCard and local accounts with building material suppliers, all guaranteed personally with none of them showing on my credit report.
Interesting…
–Natalie
Re: Personal guarentee shows up on credit - Posted by whyK-CA
Posted by whyK-CA on September 27, 2005 at 23:41:16:
Yep, you are right. I have a business account with them for a year and a half. They asked about net sales over the phone. But they are basing on my FICO.
Yes, very… - Posted by Wayne-NC
Posted by Wayne-NC on September 30, 2005 at 08:11:11:
I have business crc’s and you are correct about the personal credit report. I think a big misunderstanding is developing here. First, the CSR’s involved don’t have a clue how to answer a somewhat complicated situation and may unintentionally give misleading information. Secondly, it needs to be adressed that a personal guarantee is backing the BUSINESS debt and not the PERSONAL debt therefore not affecting a personal credit report. I am not stating this as fact because I am unsure until I get a definitive answer from a reliable source. Until then, I guard my personal FICO. Now the rest of the story. Are the rate and terms as favorable on the mortgages in the name of your LLC’s and corps even though they have your personal guarantee?
Re: Yes, very… - Posted by Natalie-VA
Posted by Natalie-VA on September 30, 2005 at 09:33:53:
I would say, generally speaking, the rate and terms on the loans to the Corp and LLC are not as favorable since they are commercial loans.
In my case, though, the rate and terms have been good since I have had a past commercial relationship with the lender with deposits on hand. Our other lender was a credit union turned bank and they were hungry to get into commercial loans, so I got a good deal there too.
I’m not sure if that’s what you were getting at or not.
–Natalie