Commercial Line of Credit
Hi BP,
I am planning to apply for a commercial line of credit with a local bank but I can't make my mind on how much to ask for and how to present my case. My goal is to expand access to funds at a sub 10% interest rate for future purchases.
On one hand, I can ask for something small like 50k with a high chance of getting approved, and grow the relationship with the bank in hopes of increasing this in the future. But I really don't have much use for 50k (average property acquisition cost 130k).
On the other hand, I can explain my expansion strategy to the bank and ask for 200k, an amount that will actually make a difference. But I am worried this will not fly and I end up sounding too optimistic.
Does a commercial bank lend money strictly based on the value at hand? How much does future growth play a role here?
Any tips from someone who has gone through this process would be greatly appreciated.