All Forum Posts by: Stanley Whigham

To fund real estate deals you need unsecured business lines of credit. It is not hard to obtain $100k to $250k of unsecured business lines of credit yourself.  If you have a corporation or llc over 2yrs old, high levels of unsecured lines of credit can be obtained with a strong Dun and Bradstreet Paydex Score, Credit Profile and a "low 5" business bank rating.

Here is what you do:

1) Establish a strong internet presence for your company by listing it on at least 15 sites-- Facebook, LinkedIn, Twitter, Scoop It, Bing, Manta, 411, Google+, Google Places, etc.

2) In addition to your business checking account, open an expense and savings account in the same bank. Purchase a certificate of deposit and borrow against it (now you have a secured loan ).

3) Make regular deposits for 90 days to establish a favorable bank rating.

4) Add higher level trade references to Dun and Bradstreet to provide depth to your Paydex Score (net 30s are usually lower amounts; you'll need higher approvals from your trade references-- 2k to 4k).

5) Upload your company financials to Dun and Bradstreet to complete your file and create a strong credit profile.

6) After 90 days apply for unsecured lines of credit. Here is why you'll be approved:

* a bank has already loaned your business money (secured loan); Dun and Bradstreet, Experian Business and Equifax Business have all reported your loan(s). The secret is to pay back and repeat the secured loan at least 3 times in the 90 day period.

* the added trade references will add credit profile depth, as will uploading your financials

* your deposit activity and use of bank products (cd) shows ability to repay

* bank rating is formed after 90 days of deposit activity 

@Marcus Squires a great way to build personal credit is through credit builder programs at many credit unions.  You will receive an installment trade line on your credit report for the amount of the loan (sometimes you can borrow up to $3,000). You don't have access to the money until you have made all of your payments-- usually 12 to 24 months. They report to all credit bureaus.  Since they are for people with bad credit, you will be approved ( as long as you can open a checking account--aren't on chexsystems). These programs are excellent because it's pretty difficult to get a trade line with a decent limit if you have credit issues.  Altura Credit Union in Riverside offers a credit builder program. Here is a link to their site:  https://www.alturacu.com/personal/borrowing/credit-builder 

@Melodee Lucido, regarding establishing lines of credit for real estate deals, check out my post here:  http://www.biggerpockets.com/forums/50/topics/119852-business-credit

@Eric Hubbard   Banks still favor corporations over LLCs.  They also want to see businesses with an office in a commercially zoned area.  Most virtual offices will be detected by Dun and Bradstreet and the banks.  You'll likely get flagged.  A home office should be avoided. The only virtual offices that "will pass the test" are in office buildings like Regus, where they also offer regular leased office space.  

@Leon Stevens Start-ups face the problem of a business with no age.  Lenders look for a minimum of 2yrs in business when approving unsecured lines of credit.  Fortunately, many business owners were doing business out of their "garages" as sole proprietors long before incorporating or forming their llc.  When forming your business credit profile, it is important to register with SAM and notify the IRS of your sole proprietor experience.  Dun and Bradstreet obtains information from these federal agencies and will update your business credit profile to reflect this sole proprietor experience.  Also, be sure to list your business on the web and include your total business experience in your profiles.

To fund real estate deals you need unsecured business lines of credit.  If you have a corporation or llc over 2yrs old, high levels of unsecured lines of credit can be obtained with a strong Dun and Bradstreet Paydex Score, Credit Profile and a "low 5" business bank rating.

Here is what you do:

1) Establish a strong internet presence for your company by listing it on at least 15 sites-- Facebook, LinkedIn, Twitter, Scoop It, Bing, Manta, 411, Google+, Google Places, etc.

2) In addition to your business checking account, open an expense and savings account in the same bank.  Purchase a certificate of deposit and borrow against it (now you have a secured loan ).

3) Make regular deposits for 90 days to establish a favorable bank rating.

4) Add higher level trade references to Dun and Bradstreet to provide depth to your Paydex Score (net 30s are usually lower amounts; you'll need higher approvals from your trade references-- 2k to 4k).

5) Upload your company financials to Dun and Bradstreet to complete your file and create a strong credit profile.

6) After 90 days apply for unsecured lines of credit.  Here is why you'll be approved:

  * a bank has already loaned your business money (secured loan); Dun and Bradstreet, Experian Business and Equifax Business have all reported your loan(s).  The secret is to pay back and repeat the secured loan at least 3 times in the 90 day period.

  * the added trade references will add credit profile depth, as will uploading your financials

  * your deposit activity and use of bank products (cd) shows ability to repay

  * bank rating is formed after 90 days of deposit activity 

Thank you @Nate Perry  I appreciate your encouragement.

Finally joined BP after reading and learning from this great resource for many years.  I dove into wholesaling and flipping about 2 years ago and have done a few deals.  I want to move on to small, distressed apartments to take advantage of the cash flow opportunities.  I know I have a lot to learn, so I want to make my mistakes and grow with the members of this site as my guides.