ForumsLoans and Lines of Credit

It sounds like your debt-to-equity ratio is out of balance. Credit scores of 690 & 711 don't qualify on the 'good' scale. Good starts at 720.

You need to revisit your personal revolving debt. Revolving debt carries with it a high interest rate. This is where the problem is since making only minumum payments means decades of repayment even if you don't use the cards again.

The bank is giving you a catch22 situation because they do not want to lend money while there is so much personal outstanding debt. You may want to rethink where you are financially right now and loose the personal debt and then make new business plans.

Hi,

I appreciate your reply. We are looking for settlement on or before 2/1/08. The total loan would be approximately $155,000 and we have approximately $50K in revolving debt. As I mentioned before....these monies were used in the business. I appreciate the above suggestions but a slap from the Diva regarding my credit score is not helpful!!! Thanks.

Good Afternoon,

I've heard from 1 bank so far and I'm currently working with 2 investment bankers in our area. As far as going to underwriters, that I'm not sure of. I know the 1 bank that we spoke to had met with an executive committee but that was all. I know it is hard to get funding now especially because of the problems with the sub prime mortgages but in 8 months this year, we have passed what we did the entire 1st year in business and are increasing every day.

Hello,

I have an Investment Group myself and I would like to comment that you are very correct when it comes to the Residential Lending Slump. But...I deal with International and National lending I haven't seen many adjustments to our programs. We have an awesome program for clients such as the lady with the garage and they are out there. Commercial lending is still striving and I would love to be of future assistance if you like.

I was not trying to slap you regarding your credit score. If you look on the credit scoring sites that is what you will see.

Diva was accurate in saying that someone generally needs a 720 or higher if they're trying to borrow without income and asset documentation. From your question, I assumed that you were providing that documentation, in which case a score above 680 should open some doors for you (and already has, it appears).

I'm not qualified to suggest a specific solution for your situation, but I know there is one because I have bought property under similar circumstances. While I had to initially accept some less favorable terms and interest rates to get the ball rolling, a good accountant helped me use that cash to my best advantage (he was not your stereotypical tax guy, but rather someone who got jazzed on the whole idea of managing business assets and credit, and who understood my relatively high tolerance for risk).

In one case, we formed separate new companies to own the building, own the unattached fixtures and equipment, and operate the facility. We then had four legal entities seeking and managing smaller amounts of debt, some of which could be secured by tangible assets and future credit card receipts -- plus each could do business with the others in ways that provided tax advantages in the short term, as well as additional funds to pay off the original higher interest loan. (I could really empathize with your post, because in that case, my own bank would not loan me $64K to buy an $81K building, but a few months later, the new corporations we set up had a total of $130K in unsecured credit available! Go figure.)

As you can already see, there are sources available for the money you need. My suggestion is to also seek the advice of an accountant on how to best use that money to achieve your business and personal financial goals. Best of luck to you both!