Corporate Credit-Would an extra $200,000 in credit help?
Corporate Credit-Would a $200,000 line help you out?
As discussed, Credit Cards, WHEN USED PROPERLY AND RESPONIBLY, can be an excellent way to fund projects, whether the project be a rehab, or even a down payment.
The thing to always remember is that credit is like a loaded gun, and if treated with disrespect, can cause a great deal of damage. That being said, most people use credit cards in their name. These are personal credit cards.
What we are going to discuss right now is Corporate Credit, or credit that is extended to businesses.
Can you get access to corporate credit? The answer is yes! I need to make sure that we are clear about what I am saying…You can get corporate credit for legitimate use in your real estate business…for the sole purpose of and intent of making a profit. Do not mistake this discussion as a way to get credit to go on vacation!
Some of the benefits to corporate credit as compared to personal credit are that corporate credit does not report to your tri merge, or credit score. You do have to sign as a guarantor of the loan, so you are guaranteeing or promising to pay back the credit used, but again, when done correctly, will not affect your personal credit score.
The second benefit is that this is an unsecured line. Which means that the line of credit is not tied to any assets. A mortgage is tied to the house. A car loan is tied to the car. Credit cards are basically tied to your worthiness as a responsible person who can manage their finances.
To access this kind of credit, you need the following:
A legitimate business presence. Yes, we are talking about creating a corporation and it is not as complicated as it may sound.
Good credit. Either you or your partner.
With these two items, you can start applying for credit and within 6 months to a year, have access to $200,000 in credit. This credit can be used for repair costs, mortgage payments, marketing, education, and even down payment money. If you could tell someone you could buy their house today, with cash, don’t you think you might be able to get a great price?
Once you have established the legitimate business presence, then you or your partner, who has good credit can start applying for cards. Look for cards with low introductory and regular rates that are favorable.
Apply for cards slowly over time. You want to apply for one every month or every other. Too many applications will have a negative effect on your personal credit. When you apply, they do check your credit, but once approved, the credit reporting goes with the entity.
As you need more credit, your partner can also apply. See how, gradually over time, you can accumulate large amounts of credit?
I currently have access to approximately $150,000 in credit. I learned how to build this credit correctly and the access to credit has allowed me to fund the last 5 homes that I purchased.
To learn more about corporate credit as a strategy the way I learned,
click here for your access to a free report that outlines more of the “myths of credit” and how you can use credit instead of cash to fund your Real Estate Investing.
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