Home: Message List - Separating Personal Credit from Business Credit - How?

Re: Separating Personal Credit from Business Credit - How?

smallbizinfo — Sat, 05 Jul 2008 01:31:59 GMT

I have a link on my web site to help businesses establish business credit and to help them find lending sources. Visit www.mysmallbizinfo.com. You can input what type of funding you are looking for and they will send you a matched list of lenders. They can also help you determine if you have the right business accounts set up to obtain business funding. It's the best resource for business funding that I've found on line to date.

Re: Separating Personal Credit from Business Credit - How?

bizconsultant — Mon, 23 Jun 2008 15:46:08 GMT

We actually work with a program for establishing seperate business credit but even more importantly or primary finance consulting program, The Ultimate Funding Solution, does one better and deals with helping people get funding from the bank they do business with by providing resources to overcome any approval objections (such as no credit, no collateral, no cash flow or bank has reached funding max) If interested in speaking further about these programs, email me your information to ajones@abcsolutions.cjb.net

Re: Separating Personal Credit from Business Credit - How?

jgoldstein — Mon, 24 Mar 2008 14:31:00 GMT

There aren't any "HARD & FAST RULES" concerning the willingness of a financial institution to lend to a smaller corporation/business with or without the owner's personal guarantee. The lender's comfort level is an important factor.

Generally, if the company has been profitable for 5+ years, has sales in excess of $1 million, and the amount being borrowed is less than 1/2 of the company's tangible net worth, there is a good possibility the personal guarantee requirement may be waived. Personal guarantees are often waived on vehicle or equipment purchases, as the lender can rely upon the resale value of the collateral in the event of a future default.

On the other hand, when financing the purchase of a building by a business, lender's will often demand the personal guarantee. The "QUICK RESALE ABILITY" of the business is also a key determinant.

The personal guarantee is there to reassure the lender that if unforseen future problems arise, the owner won't walk away leaving the lender holding the bag.

JERRY*

Re: Separating Personal Credit from Business Credit - How?

TJMorehead — Sun, 23 Mar 2008 05:45:49 GMT

Hi Ctal108,

Separating personal credit from business is doable and recommended. You establish business credit just as you do your personal. Open lines of credit under a Dun & Bradstreet number, which you have to purchase. For more information view my blogpage at www.moreheadsconnections.blogspot.com - See Your B2B Credit Coach post.

Take care,
TJ Morehead

Re: Separating Personal Credit from Business Credit - How?

bankpig — Tue, 11 Mar 2008 05:41:13 GMT

BuynSell,

Congrats on you're $2M in sales. I'm a banker and I have to say EVERYONE looks at you differently when you have over $1M in sales!

If youwere told you can only get up to $100K you are talking to the wrong banker. Most branch bankers can only submit loans up to $100K (we call this a streamlined application). You should be talking to someone who can work with larger paramenters. This means lost business to the branch when it gets kicked up, so be prepared to be persistant. An honest branchl banker should give you a proper introduction to the right person. Also, when you do a streamlined app, a computer, not a person is reviewing you're loan. With loan application over $100K, you must include your Financial Statements, which tell their own story....

For you information, that 15% of gross is more like 10% (but that isn't written in stone); banks a little tight with their money right now. 15% was last year. To get approved your FICO should be upward of 675; so you're borderline. Not much you can do with debt to income ratio unless you've recently paid down debt and you can show it.

I know that doesn't answer everything, but I hope it helps.

Regards,
Bryan
www.bankpig.com

Re: Separating Personal Credit from Business Credit - How?

bankpig — Tue, 11 Mar 2008 05:40:35 GMT

For you information, that 15% of gross is more like 10% (but that isn't written in stone); banks a little tight with their money right now. 15% was last year. To get approved your FICO should be upward of 675; so you're borderline. Not much you can do with debt to income ratio unless you've recently paid down debt and you can show it.

I know that doesn't answer everything, but I hope it helps.

Regards,
Bryan
www.bankpig.com

Re: Separating Personal Credit from Business Credit - How?

Hoopieman — Tue, 11 Mar 2008 00:37:58 GMT

I am in the process of purchasing an established business, but I need to obtain a buisness line of credit. we were going to stucture the deal as an assit sale, so how would I capitalize on the 18 years the company has been around? The last 2 years sales are in the $4.5m range.

Re: Separating Personal Credit from Business Credit - How?

creditguy — Mon, 10 Mar 2008 06:19:17 GMT

First, be aware that asking for the social security numbers of the principals does not, in and of itself, constitute your jointly obligating yourselves with your corporation for the credit. The actual loan document set forth whether or not that is the case. In fact, no lender will provide financing to the corporation alone (without personal guarantees of the principals) without seeing that the principals are clean themselves. This is also a KYC (know your customer) and AML (anti-money laundering) mandate.

Think of it from the lender's point of view. Not all borrowers who have built good corporate credit are themselves people you would want to lend to. So often the very element that determines if a lender will make a loan to a corporation by itself, is the credit of its principals. Only your good personal credit can substantiate a lender's decision to lend fund to your corporation without your personal guarantee.

Having said all that, few lenders will provide any credit (other than equipment leases) without a PG. In order to reach the status where you can get such financing, a borrower typically has to be publicly traded with more than 5000 shares a day trading at over $5, or have more than 25 shareholders and net worth of over $5 million, in addition to the strong corporate credit you have built.

Businesses can establish credit in large amounts ($25k or more) with no personal guarantee, without even a credit check, if you agree to hold the proceeds of the loan on deposit. Then you can make monthly interest payments at 4.9% apr for a while, before returning the deposited loan proceeds to repay the loan.

This builds business credit in real dollar amounts because it can be done and reported to D&B and Experian Business Credit. You can have more than one account at a time.

One other possibility: The above lender will give you the option of refinancing their loan to you, using a BofA or other bank loan or bank line of credit. To get it done, the original lender will post an amount equal to your deposited funds as collateral with the bank. Now you become the source of a big deposit and a cash-secured loan or line of credit for bofa or another bank. There is a decent chance that you could get this loan or line with no PG, given your other good credit, if you are willing to disclose your social security numbers, etc.. See http://www.creditloader.com/

Re: Separating Personal Credit from Business Credit - How?

trhaine — Thu, 06 Mar 2008 07:43:51 GMT

You know if you have a good personal credit. The bank will easily approved you. If you want to seperate your self to your business . its the time you incorporate and get an EIN.EIN is your business identity. that will seperate you from you and your business. To be able to get a busines line of credit and cash credit. you should know the vendor if they are reporting to the D and B and exparian or credit burue. which is very important. Your lucky if they report ,some vendors dont. some company report is staples to your business supp/lies
Everytime you buy and pay they will report their experienced having business with you if your a good payer or not. You should use the name of your business too.
You know I joined in business building program. but you know theres a lot of rip off and they taking advantage on you and will promise you everything. Ive learned that this company what they did is really just to charged you with out doin the service, If you find out , your getting hard to refund and they will just ask you for the processing fee to be safe in charged back. Anyway its my experienced .
anyway Im just sharing what Ive known in your question .. Good luck and God Bless!

Re: Separating Personal Credit from Business Credit - How?

FinanceHelp4U — Thu, 06 Mar 2008 04:37:42 GMT

*Hi, I can help you do this - I am a Financial Consultant and own my businesses also. I specialize in helping separate personal credit from business credit. Nobody wants to have their personal assets on the line by signing a personal guaranty for a business loan. I can help you get them separated fairly quickly and get you the type of financing your business needs. We (my other consultants and I) work hard and very efficient to perform this for companies all the time. I even have years of experience working for the U.S. Small Business Administration - so I know many routes to take to get you and your business where you need to be "successful and in your comfort zone". So, instead of worrying all the time about pledging your personal assets, you can get down to the real work at hand.....Contact me - my e-mail is *
+hardwork70@newwavecomm.net.</<br />Thanks in advance and I look forward to hearing from you and anyone else needing my type of services....*