Secured credit line

General Real Estate Investing
1

I have this idea that kind of pertains to the other thread I started…but not really.

I have 130k HELOC balance used for my business. My LLC is only 2 months old. Can I open up secured credit cards / lines of credit for my LLC? My HELOC will be paid off in a couple months, and I would like to transfer 180k to a secured credit account…then in a few months pay off my HELOC with the 180k secured line…transferring the balance to my LLC. Make any sense…and is this feasible? I would then have the 180k HELOC free and clear, with the debt on my LLC. I would be adding credit to my LLC and freeing up cash for further business transactions.

2

Is the HELOC on your personal property?

3

Yes, the HELOC is personal property.

4

I think you are making this way harder than it needs to be. If you have $180K in cash available, deposit that cash in your business bank account. Go into your bank and use that cash to secure your business line of credit. If need be, purchase long term CDs in your business name, then use them as collateral for your business LOC.

Ask for unsecured business credit cards for your business. You can probably get them easily enough with a $20K credit limit.

5

I can put the 180k into my business savings…secure a loan with that as collateral…and then pay off my HELOC where the 180k would be coming from with the business line of credit?
The purpose of this is to free up the 180k personal HELOC to use, in essence having 360k to work with instead of the 180k.

6

If you want $360K in credit lines available, then you have to have zero balances on both of them.

7

yeah, I realize that. I will be receiving 180k shortly to pay off the 180k HELOC, but instead of doing that, I would transfer the money into my business account instead of paying off the HELOC, secure a 180k LOC from that business account…transfer the HELOC balance to the new business line…pay off the new, secured BLOC, and have 180k LOC available from my business, and 180k HELOC bringing the amount availabale to 360k, instantly doubling my credit available to use, and giving an immediate credit line for my company (2 months old). My question is…is this all possible, and has anyone done this before?

8

I don’t quite follow your transactions. You have a $180K balance on your HELOC now, and $180K cash coming in.

How will you pay off the HELOC and secure a $180K loan for your business with the same cash? Maybe you can run through it again, only slower.

9

If you owe 180k on your HELOC and you have 180k coming in and you put that 180k coming in to your LLC for a secured loan would you not still have 180k balance on yourHELOC?
I’m with dave, how do you get 360k with180k coming in and 180k going out?

Phil

10

Basically I want to transfer the debt (HELOC) to my LLC.
If I can secure a line of credit in my LLC for 180k with the 180k cash, I can transfer the 180k HELOC of credit to my LLC…use the 180k cash to pay off the LLC’s line of credit leaving my balance on my LLC’s line at $0 and my HELOC at $0. I would be adding a 180k line to my LLC that I didn’t have before.

11

Your LLC line of credit depends upon the amount of collateral securing your credit line.

If you deposit $180K cash to secure a line of credit for your LLC, then withdraw those funds to pay off your HELOC, your LLC credit line goes to zero because you have no collateral to secure it.

12

Are there any lines of credit that remains after the secured line is paid down to $0?

13

I don’t think you understand what we are saying.

Your line can have a balance, even a zero balance and it will be there as long as you have the collateral that secures the credit line intact.

Remove the collateral and your credit line goes away.

14

I understand that. I’m asking if there are any products out there that can be changed from secured to unsecured.

15

Credit cards

16

You mean I could open a 20k secured credit card…pay the balance down to 0…and then switch to unsecured with the same credit limit?