How To Secure A $200,000+ Unseured Business Line Of Credit For Real Estate Or Business Investing
We have all heard the old saying “you have to spend money to make money“.
The cost of creating and maintaining a business including hiring personnel, maintenance, marketing/advertising, licenses, taxes and other additional fees can and will contribute to some of your major overhead cost. Starting a business franchise can also cost hundred of thousands of dollars and is out of reach for most. For the credit challenged, if your credit score is low you will pay a higher interest rate for a number of services including mortgages, car financing as well as health, home and car insurance.
How can brand new business or one with no income or revenue of any kind qualify to receive unsecured business lines of credit?
What many people don’t realize is that you can legally and logically create a corporate or business credit file that is independent of your personal credit file. Yes, there is a business credit reporting system that actually tracks the activity done in your business credit file. Your personal credit file, in most cases, is not used to determine your credit worthiness to obtain business credit. The information reported on your business credit file can not be reported on your personal credit file; and vice versa. What happens in your business credit file stays in your business credit file.
Businesses are given a Federal Employer Identification Number (FEIN) that looks similar to your Social Security Number to track your business credit activity.
A Limited Liability Corporation (LLC), Limited Liability Partnership (LLP), S-Corporation, C-Corporation and even Non-profits can apply for business credit. The only business this will not work for is a Sole Proprietorship or DBA (Doing Business As). A DBA is not a distinctly separate business entity. A separate business entity must be developed. If you were allowed to obtain business credit under a DBA it would basically mean if your business fails so would your personal credit; this defeats the purpose.
It is much easier to use this system to get many $50,000 business lines of credit, even
with no business income or job history, than it is to qualify for a single million dollar line of credit at your local bank.
A one week old business can obtain $200,000 - $400,000 in real money; spendable cash; not trade line credit. Trade Line Credit is credit offered to a business through a retail store like Office Max, Home Depot, etc. With trade line credit, the credit line can only be used at the store where you received the credit.
There are 15 national lenders, many of which you may be familiar with that will do what is called a State Income Application for Business Credit. This is an unsecured business line of credit. No collateral, equity, business plan, tax return or business experience is needed to qualify.
Here are the four steps you must complete in order to build your business credit file:
Step 1: Understand the Credit Reporting System.
Your business credit must be separate from your personal credit. Research the credit reporting systems: Experian, Transunion, Equifax (Personal) and Dun & Bradstreet (Business)
Step 2: Create a business name
You can visit your Secretary of State office in your area to register your business name. In most cases the cost is around $80.00.
Step 3: Contact banks in your area and let them know that you would like to do a Stated Income Application for Business Credit.
Step 4: Go Get the Money!
Theresa Johnson is an online entrepreneur and editor of Wealth Creators Ezine. To learn more about Building Your Business Credit subscribe to our free online ezine and receive weekly business credit building tips. Subscribe today –
build-your-business-credit@aweber.com or email: buildyourbusinesscredit@gmail.com
Tags: business credit, business line of credit, credit, line of credit, real estate investing