Business Line of Credit vs. Term Loan

[Darina Pogodina]

Hello BP Family.

I have one year old LLC and my company made less then 10K in 2016. I really need to obtain finance to make another purchase. When I ask my bank about business loan they advised to be more specific: "A term loan for buying something specific or a line of credit for cash flow?"

Could you please define the difference between this too different types? What are typical terms and what would be the minimum personal score? Is it possible to only use EIN number and not use personal SSN? My goal is to buy multi and hold. 

Any help is much appreciated.

Thank you so much. 

Darina 

[Bob Okenwa]

@Darina Pogodina

I've recently spoke to a few banks about lines of credit and the difference between a loan and line of credit is that the loan has a fixed term and repayment begins immediately while the LOC repayment begins only when you use funds from it and the timeline of how long it's open may be 1 year to a few years. Every bank is going to have different requirements and most of them you can check on their website. Some minimums will be 600 FICO, some may be 680, etc. Not here to solicit for any lender, but I spoke with Wells Fargo on Friday and was told that their business LOC uses the LLC EIN rather than your own SSN but it'd be best to either call your local banks and ask them or go into the branch and sit down with a banker to discuss details.