Business Loan under EIN as Capital

[Alfonzo Roberts]

Are there Bank/Credit Unions that would approve a $250k business loan as capital for a real estate company with no real estate? There is one revolving line of credit under the EIN. I was considering taking $8k from HELOC on primary residence. Pay off personal credit debt to increase personal credit score and apply for business loan for capital/first unit. Is that possible?

[Robere Istatia]

More than likely the bank would need some sort of collateral or good credit. If both are not good you are going to have a tough time getting a loan of that amount. 

[Don Konipol]

Quote from @Alfonzo Roberts:

Are there Bank/Credit Unions that would approve a $250k business loan as capital for a real estate company with no real estate? There is one revolving line of credit under the EIN. I was considering taking $8k from HELOC on primary residence. Pay off personal credit debt to increase personal credit score and apply for business loan for capital/first unit. Is that possible?

Unless a business has a substantial history of operation, a strong balance sheet, and two years successful operating history verified by filed Federal Corp or LLC tax returns, a business loan will not be approved.  What confuses people is that some lending institutions make what are actually personal loans, qualified by individuals credit score and personal income, and disguise them as “business loans”.  While the loans are made in the name of the business, they require a full personal guarantee of the borrower as individual, appear as a loan on the individuals credit record, and are linked to both the businesses EID and the individuals SS number.
So, if you have the personal credit capacity to obtain a $250k loan, as well as the operating, income, and tax returns for a business, the answer is no.

[Doug Smith]

Bank regulators hate us dirty, unwashed real estate investors. I know, I worked in banks for eons. For that amount, they will certainly want 2 years tax returns, full financials, and everything short of blood samples on the business. A HELOC in the personal name will be much easier to get than an unsecured $250K business loans.

[Kerry Baird]

Those darned YouTube promoters!  LOL

I have had two LLCs since about 2012, one owning properties in Texas and the other owning properties in Florida.  We recently formed a holding company to manage the LLCs.  All that said, I have business credit for one of the LLCs, in the form of business cards.  A few of these report to my personal credit, and the others only report to business credit.

I followed some of those step by step directions for setting up business credit, such as a Dun & Bradstreet plus a Nav account.  The MyFico website has a forum for business specific credit, under their community tab.  Really, it has been difficult figuring out how to develop this type of credit.