3 Reasons Why Business Credit Is For You

Whether you’re an enterprising entrepreneur or a resourceful investor, funding for your business or investment needs can be elusive.

There is no shortage of methods that can be used for business funding:

  • personal savings
  • retirement savings
  • personal credit cards
  • lines of credit on personal assets
  • private money or partners
  • business/personal loans

However, these methods may be limited in amount and/or require demanding qualifications. Even worse, some methods require use of YOUR money.

Personal capital should be the last resort of any entrepreneur or investor.

Here’s a smarter option: business credit w/ a personal guarantee. This is the route of least resistance.

3 Reasons Why You Should Choose Business Credit w/ a Personal Guarantee:

1. Minimum Qualifications

  • Qualifying w/ a personal guarantee is straight-forward. There are only 2 requirements: good personal credit and healthy projected income. Lenders want to know how well an applicant has managed their personal funds, and if the applicant is able to project substantial earnings from their business’s products or services.

2. Quick Transfer of Funds

  • Business credit refers to the securing of credit cards under your business entity. Typically, funding w/ a personal guarantee is swift and seamless. There are no long waits or strenuous application processes. Do you recall how quickly lending decisions came back after you applied for

Why Invest in Commercial Real Estate?

Why Invest in Commercial Real Estate?

Real Estate Investment

There has been an ongoing theory by many that investing in real estate was “the best” investment that one could make. The proponents site the numerous reasons to focus on real estate over other investments including: Safety, Income, Appreciation, Supply and Demand, and most importantly Return on Investment. Most people who choose to invest in real estate focus primarily on residential properties which are 1 to 4 units. There are advantages in investing in single family homes but I want to offer some advantages to investing in commercial multifamily properties also. Let us compare the two options.

Who Should Invest in Residential Real Estate

The obvious reason people choose to invest in single family houses versus apartment buildings are obvious. First single family homes are more readily available and most people are familiar with them.  For the average person owning the home they live in is their greatest investment. This is the American dream. Therefore there is a large market of buyers and renters. The second reason people choose to invest in one to four unit homes is the cost of entry. Before 2008 there were many programs to allow a real estate investor

Small Business Loan Personal Guarantee

Small Business Loan Personal Guarantee

A LLC or S-corp exists as an business entity that exists independently of the owners’ personal credit one of the first questions many business owner will ask is, what is the owner accountability to business liability if the entity was to go under?”

If the business is a LLC or S -corp the business owner is not personally liable for the business debt unless the owner personally guaranteed the debt. Most lenders will require a business grossing less than 5 millions annually to personally guarantee a business loan or unsecured business line of credit. However, if the loan is unsecured the borrower is not required to pledge business or personal assets to secure the debt.

Unsecured loans are very popular for amounts up to $250,000. For loans exceeding $250,000 some form of collateral is usually required by the lender in addition the bank will request the filing of a UUC lien which protects the lender from the sell of any company assets before the loan is paid.

Lending institutions are marketing their products to a slightly different kind of borrower, and make their lending decisions toward business owners that are credit-worthy and interested in long term business relationships.

How to Get a Business Loan

Money makes the business world go round. Obtaining a stable and flowing financial source is a major factor whether you are planning on a new business or growing an existing one. There are a lot of new entrepreneurs who are daunted by the task of getting a loan and don’t even know where to begin.
Here is a practical guide on how to prepare yourself and your business idea as you apply and successfully get a business loan.

1. Know the criteria that banks look for in making small loans. Different banks and lending institutions may have different standards, but in general, when you are applying for a business loan, you should have been able to meet the following criteria so they can consider you:
• Your loan is for a sound business purpose. For example, the business must be eligible based on size, use of loan proceeds and the nature of the business (no lending, speculating, passive investment, pyramid sales, gambling, etc.)
• You and your partner(s) are of good character, have experience and good personal and/or business credit history
• You have the ability to pay back the loan. This could be in a form of a collateral