Should I use Business Credit for Hard Money Loan downpayment

[Shaka Farrier]

Hey BP, I hope all is well in your ventures. I am working on getting approved for funding for my first fix and flip and wanted your opinions on possible doing it this way (without spending much (or any) out of pocket money)

Current situation:

Business Line of Credit : $15,000 @ 16%

Business Credit Card: $10,000 @ 10.9%

(Zero balances on both)

Liquid Reserves: $10,000 (personal account)

Here are my hard money lenders terms:

Finance 90% of Purchase + Repairs or up to 75% of the ARV, whichever is lower

12.99% APR

3.9 points at closing + credit line admin fee (if applicable)

2 year term

No pre-pay penalty

I plan on purchasing low at first. I'm looking to be $60k-$75k all-in (property and rehab)

My questions are:

1) My lender recommends having 20% capital upfront. 10% for the downpayment, 4% points and 6% for cash reserves. He also requires a bank statement(s) to show that I have the liquid available now (it does not need to be seasoned).

I'm thinking about writing a check to myself for $10k from the BLOC (business line of credit) and putting it in the account with my $10k reserves. That way I can show the 20% he needs to see on my bank statement.

Heres the tricky part I need help with:

After he approves me and I receive the proof of funds, can I take the $10k I moved from my BLOC and put it back to avoid having to make a payment on it? I figure, once he sees the funds in an account via the bank statement, why keep the $10k in that account if I won't need the entire $20k to get the flip started.

2) What would you consider a good ARV for this borrowed amount to work? I want to make sure that when I get the comps pulled prior to making an offer, I will have a decent spread to profit.

I hope I explained this without confusing everyone. I look forward to seeing your responses