Anybody have experience with PMG Business Solutions?

Question

I am working getting a line of credit through PMG Business Solutions in Dallas, TX.  The representative I am working with is John L. Herrick, who was at the AREA-DallasREI InvestorBLOCK seminar this past weekend.  Has anyone here borrowed money through them?  If so, was your experience a positive one?

Jeff Rountree · Answer

I have been dealing with this company for over a year. My sales rep John Herrick has been great but I have no idea how he works for these folks. Ima, my case rep is terrible. I can email her for weeks with no response and then when i get one it is curt and unprofessional. I have emailed the CEO Eddie Contreras twice to make sure he had a chance to defend his company and make this right, no response.

Not only would I not use the company i ask anyone else who has to write reviews, send a complaint to the BBB and lets get them shut down. I am hiring an attorney to investigate their practices!

John Herrick · Answer

Our product is not a series of credit cards, though it may include some. We go after a series of smaller revolving lines for our clients and thereby rack up results that are typically 3 to 5 times what a borrower can procure for themselves. The results come from decades of studying the FICO system and how it reacts to tweaks and changes recommended by us. Lots of art as well as science, and a huge service to investors. I calculated a savings of about 38-39% compared to profesisional hard money private financing costs over a five year period. Splitting up the banks also keeps you from being at the mercy of a single bank, and you are less significant and risky a customer since your line is smaller.

Jay Hinrichs · Answer

@John Herrick

I am curious how exactly do you get these loans.. is it a series of Credit cards.

Or is it actually a unsecured loan from one institution... I have a few unsecured LOC's with my commercial banks.. and I know how very hard those are to get.. this sounds like consumer credit... is that what this is ... not really a LOC like one would get from a bank.

Again just curious how you do this... of course I get my loans for 1 point and 6 % but I do have to renew them annually so 5 years would be 5 points.

Lew Payne · Answer

Wow... 15 points, up front (immediately deducted from loan proceeds)?  Here I thought I was getting too much with the 2 points that I charge, and the 2 additional points for a one-time automatic loan extension (no additional paperwork - triggered by simply not paying it off on the initial due date).  But then again, I'm just a private individual and easily satisfied with a reasonable rate of return.

John Herrick · Answer

Jim, you thought 15 points for a 5 year  unsecured credit facility was too high. I assume at some point you've used hard money. What you failed to take into account was that the note interest rate was significantly below typical hard money rates and that the credit line was open either indefinitely or renewable at no or modest cost for an additional five years.

My associate regularly puts that $150k to $200k in people's hands. Those people are delighted to get those dollars. With a few exceptions, nobody on this site complains about the cost of hard money loans. This unsecured product with a 10% rate at 720 score and 15 points saves a borrower about 38% on total costs of financing over a five year period.

Hope this gives you a bit different perspective.

Jim Livingston · Answer

I actually sat down with them last week.  I was looking for additional capital to supplement my private lenders.  I have excellent credit.  They claimed they could get me between $150K and $200K.  I asked how much their service costs...15% of all financing they get for me.  Essentially, upon getting me a line of credit or business loan, they would immediately take 15% off the top.  If they would raise the full $200K in financing, I would owe them $30K.  This did not seem like a smart move and I declined their service.

Eric Dailey · Answer

Hi Gautam,

We have not worked with PMG yet.  We may in the future, but have decided to hold off.  The main reason is that we will be purchasing a house soon and I do not want a lot of inquiries against my personal credit report prior to getting our mortgage.

We have had success in applying for smaller lines of credit (credit cards) with local banks.  Unfortunately even though these cards are for my business, at least one inquiry found its way to my personal credit report.  So, we are holding off on this as well for now.

Eric

Gautam Venkatesan · Answer

Hi @Eric Dailey

I would love to hear your experiences getting a business LOC did PMG work out for you? any tips you can share on what to look for when applying for business LOC?