Investor · Crystal, MN · Member since 2013 · 486 posts · 277 votes
I have found having my LLC have a US Bank Edge account to be an invaluable tool for financial flexibility. US Bank started my line at a generous number, and they keep sending me balance transfer checks, at 1.99 fee, with zero percent for 18 months. I love this line. But when I approach the same bank for a revolving business line of credit, the same bank says, max is 20% of prior year gross revenue.
I have two community lender banks, but one is now wanting to charge my business line of credit at 6.25%. This BLOC is backed by a free and clear property I own. I think that rate is high. Any recommendations from other lenders? What kind of interest do they charge?
And do you have any community based lenders will really good mortgage loan products. What is the craziest and best you've gotten? Always looking for another financing partner.
I actually think that 6.25% today is respectable. Most lenders I know do not have competitive HELOCs for businesses. The fact that these properties are free and clear is really the main reason you are even able to get these loans. If this were a second lien position you would most often find the answer is no at any price (rate). That being said I am aware of 2 lenders who do them and are probably a little cheaper. The rates are expressed as an amount above prime which is currently 3.75% and expected to rise more this year. This means your line David is at 2.5% over prime. I think I can do better for you but will need to check from the office next week. Please PM me and I will look into it for you.
My brother has a LOC on a property he owns free and clear that I believe is at 5%, interest only, annual renewal, no appraisal required. This was on a property he owned free and clear and the proceeds were used for a rehab on another property. He recently upped the amount, believe it is around $110k LOC on a property likely worth $180k in its current state. He has a long relationship with the bank and he works in the banking industry. I am going to try this with them soon, will let you know if I can get it going or if this was just a deal they were willing to swing with him.
I actually think that 6.25% today is respectable. Most lenders I know do not have competitive HELOCs for businesses. The fact that these properties are free and clear is really the main reason you are even able to get these loans. If this were a second lien position you would most often find the answer is no at any price (rate). That being said I am aware of 2 lenders who do them and are probably a little cheaper. The rates are expressed as an amount above prime which is currently 3.75% and expected to rise more this year. This means your line David is at 2.5% over prime. I think I can do better for you but will need to check from the office next week. Please PM me and I will look into it for you.
David Moore , did you get BLOC for your real estate LLC?
Just curious because most bank won’t give me BLOC after they find out my LLC is a rental business
I just renewed my business line of credit in November and it was raised to 6.2% with 35k of credit. I was a bit upset that it went up half a percent but everything for interest rates went up this last year. Its the cost of doing business.
I've found that US Bank in general has been the most generous with credit cards and terms. I recently just transferred over debt from multiple cards to two usBank cards with a 1.99% interest rate for 18 months. I haven't yet done it but I assume if I go in to ask for a business line of credit that my credit score is too low to get a good rate, i don't make enough (just left my 9-5 job), and I don't have enough assets to qualify for anything substantial. But they keep those credit card offers rolling in every so often!
You can always try Wells Fargo. They sent me a letter with preapproved business line of credit and wanted tax returns for proof of income. They also offered business credit cards at 0% for 12 months. The line of credit is also 3.9% for 12 months. They gave me more credit for the cards and less line of credit, but I prefer getting more at 0%.
Try getting the US Bank Edge account for your business. I find this to be invaluable. I have a 28K line with them, and monthly offers for 18 months at zero percent, with just a 1.99% one time transfer fee. They might start you lower, but they will raise you as your revenue grows.
It's a business credit card. It's an amazing deal.....a great way to finance capital improvements at zero....we nearly always pay everything before we pay interest. Interest is expensive.
David Moore Curious, which US Bank credit card do you have specifically? I see that have several different ones. How much revenue did you report to them?
David Moore Curious, which US Bank credit card do you have specifically? I see that have several different ones. How much revenue did you report to them?
US Bank Edge. It is designed for business users. I went to my local affiliate, and told them gross sales the year before. That was all it took. I have a good relationship with the bankers there. I will carry debt on their card for 18 zero percent months, all the while making minimums, and just pay it off at the end. Interest is expensive.
David Moore looks like there are three different ones that are branded as Edge. The Platinum description looks to be more geared towards balances and borrowing.
Quick funny story. So, about 6 months ago, I call up the Edge line and ask for a credit increase. I get a letter in the mail, saying sorry, we cannot raise your line at this time. A couple days later, I get an email....'we've raised your credit line'. Ha!!
@David Moore so the idea is, use a credit card to do rehab, then transfer the debt to your edge account to avoid paying it in full for 18 months while it sits at 0%, for a 2%transer fee?
how do you keep track of what amount will be coming up on the 18 month mark so you know when to pay it off? Or do you only ever have 1 transfer at a time on the edge card?
The idea is to use capital to your best possible advantage, to its best possible use. US Bank is an ilogical financial institution. They want to limit my line of credit based on revenue, but they give me a perpetual 18 month interest free loan for a one time 2% transfer fee, for a huge amount of credit. I tend to use it to finance short to long term capital improvements.
With US Bank, you need to get to know one banker. That really is the key. It is not easy, because US Bank has high turnover. So, no don't use it to do a rehab...use it to put capital to its best possible use. Interest on a BLOC right now is 6.5%. I'd rather get 18 months at zero, instead of 18 months at 6.5%.
Yes, my business is an LLC, and US Bank has not cared one iota that it is an LLC they are extending the financing to. The secondary mortgage market is tough for LLC's, but I have a great portfolio lender. It helps when doing paperwork to just sign paperwork as my LLC....there are trade offs.