15 easy ways to get business credit, loans, and credit lines for real estate investing.
Ty Crandall, Chief Executive Officer real estate is an investment it's nothing new real estate
investing has been around for thousands of years. It predates stock markets and other methods of
trading and valuing wealth, land used to be the best sign of anyone's wealth why because land
is permanent. Let's fast forward to today while renting out real estate investments
remains a popular way to profit from land and buildings. The real money and the real numbers
are in flipping buying low and selling high and rapidly changing markets and fixing up
rehabs for profit is all the rage. Just how popular is house-flipping? According to the
real wealth Network 2016 was a banner year for flipping in the United States as in 6.6%
of all single-family condo and home sales were flips. How do you go about funding all
that flipping? Turning to business credit to get the money to flip as a smart business choice and
you might be tempted to try a traditional lender or credit provider like a bank or a credit union,
but don't bother credit unions and commercial lenders like banks will most likely not loan
to you, unless your credit is impeccable and you have been in business for a long time.
Why because real estate and other financial industries are considered to be high risk.
The SBA can't help either the Small Business Administration does not actually loan money
instead they set loan guidelines because the SBA guarantees these loans rates are more favorable
and terms are more flexible, but the SBA says real estate investing is too high a risk for them.
Delays can be costly if you had to wait around until your bank or credit union
would feel comfortable enough to give you a loan or extend credit, you'd be waiting
a long time and you would be missing out on opportunities, fortunately, you've got other options.
Let's talk about trying other options. Banks and credit unions got you down they aren't
the only lenders out there according to the US Department of Revenue most business loans and
credit lines that are available today don't come from big conventional banks.
Here are some more options that you can try and that are proven to work.
Here's how we can help. We work with all legitimate types of funding programs that
are available today offering funding through hundreds of investors and lenders through a
multitude of different funding programs, so we know the solutions that can help you succeed.
15. Unsecured credit access up to $150,000 an unsecured credit with 0% rates that you
can secure even as a startup. Unsecured credit is offered without the need for collateral or
a show of assets for approval, instead the loan or credit is based on the borrower's promise to repay.
A 0% program is perfect for high-risk industries like real estate investments, it's perfect when
you're getting started to. You can get credit lines to take cash out of these accounts
report to the business credit reporting agencies thereby helping you build your business credit.
Even startups can be approved you don't need collateral or a show of cash flow you just need
a 680 or better credit score, you don't even need a guarantor. 14. Business revenue lending and cash
advances it's not a loan business revenue lending also called cash flow financing is an advanced
based on the expected future sales and revenues of a business, we can get you 72 hour financing. 13.
cash flow financing, cash flow financing is one of the most popular types of business financing today
this is fast and easy money all that is needed for approval is a 6 month bank statement review,
you can typically get approval for 10 to 12% of your annual revenue so if you have
$600,000 in annual revenue that means you can get a $60,000 loan or if you have
$400,000 in annual revenue then you can get a $40,000 loan.
There are no collateral requirements lenders will often lend to as low as a 500 FICO score
and some lenders don't have credit requirements at all. How do you go about qualifying for cash flow
financing? Typically you need to be in business for at least a year you should have revenue of over
$10,000 a month you will need to have more than 10 monthly deposits. You need a positive
bank balance at the end of each month. Here are some of the benefits of cash flow financing. Once
you have paid back half of your loan you will be offered another loan. Terms will get longer and
the rates will get better over 70% of funded customers will come back and get more money.
12. Merchant cash advances, these are similar to cash flow financing but only credit-card
deposits are counted the qualifications tend to be easier in some cases you will only need $5,000
in deposits to qualify. 11.Securities based lines of credit, got stocks and bonds
you can use them as collateral to get business credit rates are usually less than 5%
there are no cash flow or consumer credit requirements. You don't need bank statements
or tax returns for approval you, will still earn interest on the stocks and bonds that
you have. You can use any stocks you currently own it's leverage to get business financing.
Borrow as much as 90% of the value of your stocks you will continue to earn interest on any stocks
you are pledging as collateral closing and funding takes less than 3 weeks. 10. 401k financing,
use your existing 401k or IRA as collateral for business financing these are IRS proven strategies
with no tax penalties, plus you can still earn interest on your 401k and pay low rates often
less than 5% you can close and fund in less than 3 weeks. Get up to 100% of what you can rollover
within your 401k. There are no consumer credit score requirements even a start-up business can
be approved, you don't need a tax return or a bank statement review, get approved for a loan
equal to 100% of the value of the 401k. The idea is that you are investing your 401k in your own
business. This is instead of buying stocks and other businesses there are no tax ramifications.
9. Accounts receivable financing use your outstanding accounts receivable for financing
get as much as 80% of your receivables advanced to you in less than 24 hours. The remainder of
the accounts receivable will be released once the invoice is paid in full. Closing takes two
weeks or less and the factor rates are as low as 1.33% however
your receivables should be with the government or another business. Accounts receivable financing or
factoring is ideal for any business which receives orders to fulfill and isn't paid for weeks or even
months later, with accounts receivable financing you can get up to 80%of your receivables
advance to you within 24 hours. The remaining 20% is advanced to you after the invoice is fully
paid, There are no consumer credit requirements and there are no cash flow requirements for
approval rates are very low as low as 1.25% discount you should be in business for one
year or more. 8. House flipper financing get 100% of the financing you may need to purchase
and rehabilitate residential properties. Lenders will loan up to 65% of after repair value you can
usually get a 6 month term or get an extension if you need one. Rates range from 8% and up.
You will need to have a 660 Plus FICO score for approval lenders will want you to have flipping
experience you will need to have cash on hand to put into an escrow account. Use the real property
as collateral funds in a house reseller program are available for short term residential purchase
and renovation projects. This is because most traditional banks and credit unions will not
approve these kinds of loans. Authorized money is then held in escrow and released in draws
as your contractors complete renovations. Let's touch on building business credit don't have a
good enough FICO score to qualify for some of these options then it's time to start building
business credit the first step is easy. 7. Vendor credit to the rescue 1 easy method of getting
started in building credit is what's called vendor or trade credit if you get your coffee
from the same supplier every month, why not ask for trade credit on future purchases. Not every
vendor reports trade credit to credit bureaus. So find out if your vendor does and act accordingly.
Why vendor credit, vendor credit is often very easy to get it establishes a relationship with your
company and the vendor it often supports a local business. Get your first 5 credit accounts through
vendor credit and get the ball rolling. What are trade references according to Dun & Bradstreet
suppliers reporting their positive experiences to the credit reporting bureaus are creating what
are called trade references. Trade references can often give potential lenders a clearer
perspective on your ability to pay back this is information beyond just the numbers it can make
it clear if you engage in risky practices such as putting off paying your suppliers to pay utilities.
Going past vendor credit next up is store credit once you have established decent
vendor credit your business should be able to qualify for store credit.
6. Store credit when you were building personal credit some of the first places to send you credit
offers were probably businesses the same can work for business credit got credit with home
improvement stores like Lowe's or Home Depot then use it for real estate fixes and flips.
What if you end up buying what you don't need sometimes in order to establish good store credit
you are just going to have to buy some things you do not need in order to get a history going.
Why not donate those Goods to your community when you get store credit at home improvement
stores your purchases can be more practical for your real estate investment. 5. Fleet credit next,
you can get fleet credit, fleet credit is a credit card which allows your business to maintain a set
of vehicles. These are usually fuel cards and they can be used to purchase fuel repairs and
maintenance. You might provide fleet cards to all of your business's drivers for their company use.
Let's get some more trade accounts, you want to keep going with trade accounts consider all of
the vendors you work with regularly and open trade accounts, try office supplies cleaning
services caterers vehicle repairs etc., you're working toward 10 or more trade accounts. For
qualifying for cash credit a cash credit is a short-term cash loan to a business the lender
provides this type of funding but only after getting the required security to secure the loan.
One security for repayment is given the business receiving the loan can continuously draw from the
bank up to a certain specified amount. 3. business credit cards, business credit cards
are another funding option like personal credit cards business credit cards must be
paid off in a timely fashion. Business credit utilization should be kept below 30% of total
available credit, late and incomplete payments will impact your business credit score directly.
You can get high-limit credit cards in your business name which are linked to your business
EIN with no consumer credit inquiry. There are no cash flow or collateral requirements you can get
immediate vendor credit approvals. Get high limit store credit within 30 to 90 days get high limit
cash and fleet credit within 120 to 180 days and Auto vehicle financing. 2. Business credit lines,
a business credit line differs from a business credit card in that it is more like a debit card
you can borrow up to a certain limit and then you only pay interest on the money you have borrowed.
You can draw and repay funds so long as you do not exceed your credit limit a business
line of credit is for several purposes not just one like with a business loan.
1. Crowdfunding sites for crowdfunding include Kickstarter and IndieGoGo this
funding gathers money from a crowd or a lot of people instead of one big investor. If
the crowd likes your idea they may decide to donate money to your project generally
crowdfunding doesn't need to be paid back a good pitch is key to successful crowdfunding.
A word about credit history and management with all types of credit and financing remember don't
borrow more than you can pay back, pay back as much as you can as quickly as you can and keep
thinking of ways to improve and increase your available business credit. Here's a bonus have
you considered grants, did you know that the government hands out grants for real estate
investors, a grant is a lot like a scholarship it's free money you do not have to pay it back.
How do you go about finding grants the government has a searchable database of available
grants at, www.grants.gov search under keywords like housing homeless and infrastructure terms like
house rehabilitation and structure, get you to many unrelated results. But you must act quickly
for grants. Grants often close quickly many are available only for a few months fortunately you
can apply for more than one grant at a time. Fill out the application thoroughly and is
correctly as you can. What about HUD grants search for HUD grants here portal.hud.gov
NOFA's Notices of Funding Availability include the contact where you send your application
if you apply for more than one HUD grant it must be a separate application under the correct NOFA.
Don't forget about local grants, your local government might provide grants for housing
offer a partnership to your city or town ask for local government support for your project
most municipalities want neighborhoods to be rehabilitated. So property values will rise
your chances of success will improve if you appeal to this specific local government need.
Here are some pro tips about grants. A grant requires a grant proposal they are a lot
like business plans a local address is usually a bonus when applying for a grant write a clear and
succinct cover letter. Check delivery requirements mail or in person and follow them to the letter.
Contact us today to learn more about getting money to invest in real estate.