How to Build a Business Line of Credit

[Michael Wexler]

I have an LLC that is 6 yrs old but has never been used. I have an EIN and a DUNS #. My question is how and where can I go to start building a cash business line of credit of at least $50,000?

I have been online looking at different companies and none of them seem legit.  I have even been scammed of $2500 already to help me with this.

Any info on a legitimate program or service that can help me would be great.

[Neil Aggarwal]

The banks around here will only lend with some collateral in place.

[Henry L.]

I would not trust those, many are either scams or predatory lending that will hurt you in the long run. 

0% apr credit cards can be nice depending on your credit score and if you will be able to pay it off before interest. I have well over 50k limit on my cards. 

[Tim Hackett]

I started with a personally guaranteed Amex. Most any lines of credit will require your personal guarantee.

And time. Takes a while to build that business credit line.

[Bryan Hancock]

Past $50k the banks are probably going to quit relying on a signature and wish to have some collateral.  That seems to be the inflection point for most lenders I have spoken with. 

As for building your credit these are things to look at:

1.  Personal credit score - Yes, they'll probably care

2.  Derogatory items on your personal credit

3.  Credit inquiries

4.  Credit maturity

5.  Credit diversity (Mortgage, auto, credit)

6.  Credit report addresses, aliases, and employment accuracy

7.  D&B - DUNs rating

8.  Experian business score

9.  Equifax business score

10. Revenue documentation

11. Assets and liabilities/net worth

12. Debt coverage ratio

13. Revolving debt ratio

14. Time in business

15. Type of business

16. Secretary of State verification

17. Phone and voicemail verification

18. Address/Phone directory verification

19. Website, email

20. Bank theatrics

All of the items above made up a scoring system when I was building our business credit.  Some matter more than others.  Your credit and revolving debt ratios have higher scores than other items like type of business.  In 2009 our business had a score of around 69/100 and now we're basically a perfect score.  It took time to build everything.  Like anything in life that's worth having it is hard and takes time.  Don't pay some firm to coke together a line for you.  Work hard to put together a solid business, pay your bills, talk to lenders, and you'll get what you want.  If you ask around in your community there are probably banks that specialize in stuff like this.  

[Michael Worley]

There is a line of reasoning on some message boards that you can establish a business credit profile and not have to borrow money in your own name once you get established. I can tell you that most of the people that say that aren't speaking from experience. Any business that finances working capital, term loans for cap ex or real estate almost always signs a personal guarantee.

[Michael Worley]

Originally posted by @Michael Wexler:

I have an LLC that is 6 yrs old but has never been used. I have an EIN and a DUNS #. My question is how and where can I go to start building a cash business line of credit of at least $50,000?

I have been online looking at different companies and none of them seem legit.  I have even been scammed of $2500 already to help me with this.

Any info on a legitimate program or service that can help me would be great.

Also, look into SBA loans. You can get an SBA express loan (for Lines of Credit up to $350,000) or a 7A loan (term loan, but you can get them for working capital, it will be amortizing though).

[Miguel Perez]

Hello everyone i just start my LLC to buy fix and flip and my bank give me a 25k unsecured line of credit ..FYI

[Wayne Brooks]

You need either:

1) the personal financials already.....liquidity and steady good income

2) a track record for the business over a number of years actually Being a business, good gross revenues and net profits