I am looking for lenders who will loan to only the LLC for loans. When I talk to most the banks around here they only want to do the loan in my name. I understand in the begining I will have to cosign the loans since the LLC is new, but I am trying to build long term relationships with the banks. Does anyone have a list of which banks will do loans to LLC’s?
Hi,
Virtually every bank will loan to LLC's!
With that said you will need to spend somewhere between 2 and 5 years to get to the point where you can do this without a personal guarantee.
You will need a personal fico score over 750 in todays banking market as the “Responsible Party” manager of the loan.
You will need a low debt to income ratio and show history of responsible handling of finances.
(This is to qualify as “Responsible Party” manager of the investment.)
Your LLC will need to elect to do it’s own tax returns and show an increasing profit margin and a decreasing debt ratio.
Your LLC will need to have 2 to 5 years returns!
Your LLC will need to get a Paydex and a D&B rating established with virtually perfect scores and a history paying LLC debt as agreed.
The bank or lender may want to see your insurance certificates and obviously proof of good standing as a LLC for all the years your LLC exists.
Your LLC probable needs to put away investments in CD’s, Mutual Funds, Trading Accounts and Savings to show liquidity and ability to defend an investment loss with reserves.
When you build an entity worthy of corporate credit, banks and lenders will jump out at you and you will start recieving offers by mail, email or business to business calls soliciting your business.
Good luck,
GR
THat is what I thought, but a lot of the banks are saying they do not loan to LLCs. It sounds like the person I am talking to does not work in that section, and that is why they do not loan to LLC.
How can I pull up my business credit score? Right now I know i do not have one since I just started it recently. That is why I am trying to get some credit attached to the business so it can stand on it’s own.
I had never thought about the CD, mututal funds, etc for a business. I think that is a very good suggestion, and something I should start on now.
Hi,
First establish and register your LLC as a entity with Paydex and Dunn & Bradstreet so you establish proof your LLC exists and has a registry account to allow tracking of business payments and good credit.
To establish credit and improve your LLC's score you will need to open a small business Visa or Mastercard account, or an American Express business account. (Make sure they report to your business credit accounts.)
You can also improve ratings by establishing credit with Staples, Office Max, Fedex Kinko’s, Ford, GM, Chrysler, etc.
You may have to act as and be a Guarantor to begin to establish credit.
Bank Statements and a bank account need to be established with monthly records.
GR
Now why can’t everyone be as helpful as you?
I could not find a place to register with paydex. It appears that is a score that D&B generates. I was able to register with Dunn and Bradstreet though.
I have tried to get a credit card with my bank but they turned me down since the business is new. they said right now it will take about 2 years because of the credit crunch.
Dell though did give the business a credit card as long as I cosigned it. Some credit I suppose is better then none.
I am trying to find a Visa business secured card, but I am not having any luck. My credit score is decent with an 800, and my debt to income ratio is low.
Dunn called me back today. They said the free number could not be used to track credit, and that I would have to pay the 320 fee. Is this true? I don’t mind paying a fee, but I need to get something out of the deal for it.
Also, I talked to Bank of America and they said no banks does loans to an LLC for SFH. Are there any banks that anyone has had success with?
One of our previous bankers tried to get us to do the D&B crap to build credit. She said it would cost some money, but be well worth it, blah blah blah. We didn’t do it and we still get funding for what we need.
B of A is full of crap. Our bank loans on SFHs all the time for us. Our banker would prefer we buy SFHs. You need to find a local bank. You’re not going to find what you want going into a corporate bank where the entry level person you talk to has eight bosses and TPS reports to submit…
It never ceases to amaze me how much BS someone will feed (even bold face lies) to make a buck!! You don’t need to pay a DIME to D&S to get your Duns# to start establishing your LLC credit status. The reps at Duns will tell you all day long that you need to pay their crap fees to start your credit profile, THEY’RE ALL FULL OF IT! The trick is to register with Duns and tell them you need the number to work with govt contractors and using this method you can get your number without paying a dime to them. Trust me, I did it and it works! YOu can also do everything online without ever dealing with their sales reps.
Secondly, I agree with justin that BofA is full of crap too. all sorts of local banks are doing funding for SFH through LLCs. What you need to know is that you need to talk to the commercial banker, NOT the residential guy, because you’re funding through your LLC, it automatically makes the loan a commercial loan, NOT a basic residential mortgage…
Gold River is giving great advice. One thing to remember if at any time you give your SS number to acquire money even in your LLC or legal corp it is not a business loan it is a business loan with you as a guarantee which means if default happens your credit is going to get hurt and your Corporation will become meaningless because they know they can never collect from a failing corporation but can collect from you. Give your FIN number only.
Most banks are going to want the personal guarantee though while the LLC is still pretty new. If you don’t guarantee the loan, good luck getting it with a new LLC on its own credit-worthiness.
Well that is the issue I am having is most banks will only take SS and not EIN. I have some new leads I am gonig to follow up on today. I don’t mind cosigning right now because of the age of the business. I do want to get to the point where I do not need to do that though.