Help Understand lines of credit and Business LOC

4 Replies | Indianapolis, Indiana

Hi BP, im in need of some advice/coaching.

I spoke to a private lender today about getting a LOC, during our conversation he recommended that i look into the following product he has

a 0% business loc for the first  9-12 months then 9% interest after that 12 months. the line of credit would be for 200k but there's a 10% fee on the back end. 

this would also mean i would need to create a business to be able to acquire this loan. he did mention that the loc's can be from multiple credit cards, and thus would incur fees (1-3%) to take cash out.  he also mentioned that i should definitely apply for a business loc before going for a personal loc because if i do it the other way, i could hurt my chances in the future.

i did some reasearch before speaking to him and from my research, i should really be looking for a revolving personal line of credit with simple interest.

i have excellent credit and not worried about getting high rates. 

my question is am i trying to bite off more than i can chew by going for a business loc?

also, my goals are to purchase 1 or 2 mfr with the loc as a dp, so needing about 30 to 50k really.  my plan is to purchase them in my name first and then transfer over to an Llc (which i need to setup).

please, any advice would be very much appreciated.

Hi Henry,

If you have income generating business with good business credit score then you can get business loans with very less interest rates. If not, the rates/charges that you mentioned are typically charged.

As you mentioned you've excellent credit score,  I suggest to apply for unsecured loan with Sofi. They might charge around 6.9% (if you enroll for auto monthly payments) and can easily  get around $60K +



Account Closed thanks for the recommendation.

my followup question, if i apply for a personal loc but dont have a balance on it, would that still ffect me getting a business line of credit few months down the road?

Hi Henry, 

Sorry. I don't have an answer. But I think you shouldn't have any hard enquiries in your personal credit history in the past 6 months before applying for the  business loc products you had mentioned.