Hello. I currently have assets on hand and want to start a business involving Real Estate. I have excellent personal credit with high limits and top scores.
Real estate as you know for decent properties is quite pricey for acquisition and there are loads of parcels across the country for sale in various locales from various players.
My issue right now is financing the business and getting to the point of being able to reach a 1 Million USD credit line at a bare minimum with non personally guaranteed credit. There isn't much if anything I can do with much lower credit lines in the real estate market considering salaries, materials, and properties and the like is quite pricey and even 1 Million USD will just be a start.
It may take a little time to get financing going for the business but just like personal credit, business credit needs to be worked on. The problem is that I need high credit lines to fund the business since lower amounts will just serve to establish basic foundations without any acquisition of real estate.
I am just looking for a general discussion, not a recommendation of anyone marketting business services or lenders at this time.
I have been peddled for a Bank Of America business credit card before and perhaps others as I opted out of credit card solicitations from all credit issuers. But from what I have heard those cards require personal guarantees which I am not willing to give.
I am all too familiar with credit card funding as being the basis of the easiest to get funding with the best rates for those with high FICO Scores including very low rate offerings far below other loan offering mechanisms for yearly revolving cycles with transferability.
My business plan will focus on property acquisition of real estate with specific criteria, which will lead to profit maximization in situations where valuations of existing properties can be unlocked to huge potential and be a huge benefit to the economy especially in this down real estate market as there are loads of ways to unlock the valuations of properties in the USA and around the globe.
If my business plan succeeds I expect to be hiring lots of employees and hopefully be a firm with a very high growth rate that will succeed over the long haul as we approach the next great business cycle.
So to sum up what I am looking for here:
I realize establishing business credit takes time and so it could take up to 2 years to potentially establish this business and am fully aware of the players in the business credit scoring industry without using a personal guarantee.
Apparently, from what I have heard, the SBA loans specifically exclude investor real estate from loans they would underwrite and so from what I can tell, it doesn't look like I would be able to nor should be using governmental loans to finance the business but rather loans provided from the private sector.
So really Im looking for what would be the best method or approach to obtaining substantial business credit without personal guarantees as an entrepreneur who needs to get started but also knows he needs very significant funding in order to get started.
Property acquisition before added capital improvements, labor costs, and so on and so forth on one property could come out at $700,000. There won't be anything I can do on a small business line of credit in order to generate cash flow for the business which will need a minimum of 1 million USD Financing to even have a shot at producing cash flow and will likely be in the red for the short term. However the risk/reward ratio and upside potential is extremely high.
I have launched preliminary inquiries with institutions. The small business credit cards without nearly enough funding provided would have to be based on my personal credit for establishing accounts at this time.
And yes I realize one can establish trade accounts with various vendors before obtaining merchant accounts however I have heard that these firms have cut back acceptance and I really don't want to buy anything right now till I know I have the funding I will need to even take the risk.