Hard Money vs Business Credit

[Daniel Jost]

I recently watched a webinar from a company called Fund and Grow that seemed interesting. They strategize using 0% interest business bank credit cards at $50-$250k credit limits to buy properties, and you use a third party service like Plastiq to wire the money to the title company, contractor, etc for 2.5%. They said the cost per month is 1% of your outstanding balance, not the overall limit. After 12 months they help you “stack” it onto another credit card with a 0% balance. At the end of the term the rate goes to 12% if you haven’t paid it off by then.

They charge $3997 for this service which includes setting up your business account that applies for the credit, negotiations, etc. I believe this charge is every 12 months when you transfer to another card, I may be wrong. Their pitch is that it’s much cheaper and more creative than hard money.

I’ve never used either but in my next deal I’d like to use an additional source of funding so I’m not over leveraged. Any advice on this subject is most welcome!

[Nicole Heasley Beitenman]

I got sucked into that a few years ago. Totally wasn't worth it. Steer clear.