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    19 Replies Latest reply on Oct 19, 2008 3:31 PM by mistataco693

    How is it possible?? Credit lines with only business EIN?

    CConcepts Newbie
      Hello to all. My name is John and I recently decided to start my own business, as I am tired of making everyone else money while my family does without. The field of my company (Carolina Concepts) is of construction nature, remodeling, repairs, interior trim, cleanings, ect... Myself having over 15 years experience in those fields. I have read a bunch of articles on the net about it being possible to get business credit cards and credit lines with only the business EIN, which I have. My business is very new, just started it last month. I have several leads on bids for the state projects upcoming (one is an addition / remodeling of a school) but lack the funds to bid on the job, due to lack of tools needed, and the bid bond to secure my bid. My personal credit has taken a big hit over the past several years, I had my score up to 620 last year, then after getting laid off, didnt have the money to make any credit card payments, so now my score is horribly low... I figure the only resort I have left is to build my company up with a good credit history, seperate from my personal history. How do I do this? There has got to be a way to get the funding I need to get my company up and running and bringing in good money for my family. I have a EIN, and have registered with D&B, but wont get my DUNNS number for a few weeks.
      I would only need around 7500 to get the tools needed, a truck, and to secure my bids. If anyone can tell me where to go, apply for business credit without having to worry about my SSN being involved please help!
        • Re: How is it possible?? Credit lines with only business EIN?
          Fortis Wayfarer
          Hello John,

          Hope all is well. I've emailed you directly with all my contact information.

          Thanks

          Collin
          Fortis Capital
          cobringer@gofortis.com
            • Re: How is it possible?? Credit lines with only business EIN?
              CConcepts Newbie
              Collin, thank you for your info in my email, however, I went to the website to check out the application, and seeing how it does require SSN as well as EIN, I highly doubt it will help me. I really dont need any more hits to my personal credit, which will just make things harder for me. I could be wrong, equipment financing could in fact be my answer, but Im having trouble getting a business account throught Staples even....And I heard thats one of the easiest to get when establishing business credit.
            • Re: How is it possible?? Credit lines with only business EIN?
              training_days Newbie
              Believe me I feel your pain. I am in the process of starting my second business. I started my first business (graphic design)with my wife with nnnnnnoooooooo credit and a very low credit score. I looked HIGH and LOW for loans but, not having any collateral and the low credit score really hurt. Yes, when creditors use your tax id number they also use your SSN to pull a credit score. We had to use A LOT of our own funds to keep the business afloat. Whatever the business made went right back to the business and our personal bills to a hit. We also have 2 little kids!!! There were some VERY lean months. If you can keep plugging alone it will be worth it in the long run. I know this is not what you really wanted to hear but, I just wanted to let you know that we went through the EXACT same thing. If you have any questions feel free to email me.

              rdavis0772@gmail.com
                • Re: How is it possible?? Credit lines with only business EIN?
                  CConcepts Newbie
                  I hear ya....Worst part of it all, Im currently drawing unemployment to pay the bills...and thats all it does, just barely....my wife cleans houses under the table, not very much money mind you, but it helps....I know if I were to just land one good bid, i would be able to get back on track and take it from there. Ive done trim work for Bill Clark Homes, the nations 5th largest builder, when I was working for a trim company. One bid I have a chance to get in on right now could easily put 10 - 15 grand in our bank account and get us on track, but i dont have the money for the tools and bid bond i need. I have the knowledge to do the jobs and do them the right way, but cant find a lender willing to take a chance. Ive seen a few posts in here about people getting funding with only the business EIN, but they never say who or what company they got it from....they just tell everyone to search in google....Ive got two small children as well, and dont want to see them struggle like we are doing. And i cant afford to spend 300 - 500 bucks i dont have to get a business credit builder to get my company up and going for me.
                • Re: How is it possible?? Credit lines with only business EIN?
                  NoBullFunding Scout
                  When talking about a startup with no track record, your personal credit is paramount. Realistically it will be hard to get a non-recourse (i.e. not guaranteed by you) line of credit with a bank. If $7,500 is what you need, perhaps you can just use an existing credit card? You can also try Prosper.com, but you will need to talk your way through the low credit score.
                    • Re: How is it possible?? Credit lines with only business EIN?
                      CConcepts Newbie
                      I tried prosper, but cant get past the fico score issue....dont have any credit cards with that high of a limit or i would have done that allready. Somebody has to have some connections out there, or at least the proper and fastest way to get business credit established.
                        • Re: How is it possible?? Credit lines with only business EIN?
                          GrowthCurve Adventurer

                          John -

                          Be very, very careful here. Regrettably, there are people in this world who will use your frustration and hope against you in this matter. They will offer you the sun and the moon, only you'll be left with nothing more than an empty wallet.

                          I'm sure you know that business credit (at least from banks and traditional sources) is very hard to come by right now. Frankly, it was never quite as easy as some people would have you think, and it has never been easy to borrow money based solely on business credit with no consideration as to the person(s) behind the business.

                          There is a chance that you can establish a line of credit in your business name with places like FedEx and Staples and companies like this (more retail-type operations that are gambling with you because they want to make sales and book revenue), and doing this will help you build a business credit profile (e.g., PAYDEX) but I do not foresee that you will be able to get your hands on cash to buy tools and pay for bonds, etc., at least not based solely on your business credit.

                          Again, be very careful here, as there are those who will use your desperation to separate you from your last few hundred dollars.

                           


                          Now, on to how you can try to get this done...can you detail exactly what the $7,500 is for? Let's work together to find a way to get there from here.

                            • Re: How is it possible?? Credit lines with only business EIN?
                              CConcepts Newbie
                              GrowthCurve, I agree on what your saying. As far as breaking down the 7500, here goes. My wife and I only have the family car at the moment, thus I need a decent work truck for hauling my tools. I figure I can find a reliable truck for around 2500. I am lacking in some bigger power tools needed for the jobs i can bid on. List as follows: 2 12" double compound miter saw with stands, $1500 Air compressor, $250, 16 and 18 gauge trim guns and air hoses $500, misc hand tools i dont have $100. The remainder is to purchase workers comp insurance (gen contractors require before accepting bids) and bid bonds to secure my bids. e.g. School project getting ready to get underway, approx 32,000 sq. ft of addition. 32,000 x .60 linear ft = $19,200 bid to do the trim work. bid bond is 10% of bid = 1920 out of my pocket just to place the bid. I get that back if my bid is rejected, but still have to have it to place the bid. thats basically where the money is needed. I added a little extra just to be on the safe side. I could easily pay back my lender within a few months. There are other bids upcoming in the near future as well. 31 buildings (8 units per building) @ roughly 1000 linear ft per unit. Thats a real money maker there.
                                • Re: How is it possible?? Credit lines with only business EIN?
                                  GrowthCurve Adventurer

                                  When reading this reply, please understand that I do not know all of the ins and outs of your business. As a result, some of my ideas may not make any sense or be doable. Having said that...

                                  I'd try very hard to bring the amount of money that you need down. I know you're not going crazy and suggesting idiotic things like, "Brand new GMC truck with all the options, $40,000," but maybe you can still cut a little.

                                  For example, the truck. Will you be doing the work on your own? If not, perhaps whoever is working with you will have a truck. I'm a little worried about a $2500 truck being reliable. How long will the job last if you get it? Any chance that just renting a truck for that time period would make sense? Is there anyone you can just borrow a truck from for the job?

                                  Gotta get creative here...

                                  Also, the tools...do they have to be brand new? I would think eBay would be a great place to find these items. Maybe not the stands if they are costly to ship, but the saws? As for the compressor, trim guns, air hoses...can't you rent those?

                                   


                                  As for the bid bond, can you get a bid bond from another company? If you Google "bid bonds," it looks like you have a number of options.

                                   


                                  I'm just trying to see how you can get off the ground here with as little cash as possible. Maybe you make a little less on the job with your rental and bond costs, but at least you're working and making money.

                                   


                                  As a last resort, can you do this work for someone else for a year and save up the money to go on your own?
                                    • Re: How is it possible?? Credit lines with only business EIN?
                                      CConcepts Newbie
                                      Well I have thought about renting some of the equipment, but with the deposits required and since My type of business constantly uses these tools, it would be cheaper in the long run to buy them, but they def dont have to be new, could check into some pawnshops possibly....as far as the truck goes, i had a 500 ford ranger a few years back that ran like a champ, so I'd be willing to lower the truck cost to 1500 to be safe and still find something that could last through 2 jobs, and that would pay for itself. As far as doing the work for someone else for a year, ive been doing this type of work for other people for SEVERAL years and took great joy in watching them make mad profits from MY work. lol.....Basically the BIGGEST problem i have is right now i virtually have NO money whatsoever to put towards this business. Maybe im stupid for trying to even get one going, but I know there have been other people in the same situation and stuck it out and made it. So after thinking about just the basic funding amount and with your advice, I think I could safely lower it to around 4500 or so. How do hard money loans work? Ive read about those, but have really no clue as to how they work. thanks again to everyone who has responded.
                                        • Re: How is it possible?? Credit lines with only business EIN?
                                          GrowthCurve Adventurer

                                          Agreed that it costs less to own in the long run, but we're talking about getting you up and running.

                                          I don't think you're going to like hearing this, but I'm being candid...

                                          You say that you've been watching other guys make money off your back for years now. Were you thinking about starting your own business eventually all the while, or is this something that you just recently thought of?

                                          You would have known that it would take you a few thousand dollars, at least, to start your business. If you had the idea in your head for the last three years, you could have saved $40 a week for three years, and you'd have $6,000 saved to start your business. Forty dollars a week!

                                          You could have delivered pizzas one night a week and made that. (If you really want your own business, you'll do whatever it takes to have it.)

                                           


                                          OK, enough of me preaching...the past is the past, and it's time to look to the future.

                                           


                                          Do you know anyone with $5,000? Is there anyone out there who believes that you know what you're doing and can loan you the cash?

                                           


                                          As for hard money, what that usually means is that the loan is being made against a hard asset -- usually real estate -- and the loan to value is so low that the lender does not care about the borrower's credit or income. For example, if you had a $100,000 house free and clear, a hard money lender might loan you up to $60,000 against it, regardless of your finances. He would do this because he knows he can always sell the house for at least what he's owed.

                                           


                                          If you don't have any assets at all, then you're probably not able to get this kind of financing.

                                           


                                          You are 100% NOT "stupid" for trying to make your life better and to be your own boss. In fact, you're 100% smart for starting to think this way. I just wish you had thought three years in advance, because if you had, you'd have $6,000 to get going with.

                                          Have you contacted your local SBDC or something like that to see if there is a microloan program in your area?

                                          • Re: How is it possible?? Credit lines with only business EIN?
                                            Lighthouse24 Ranger
                                            CConcepts, please keep in mind that if you found a lender, and if you won the school job you want to bid on, your expenditures would begin immediately -- truck, equipment, supplies, payroll, insurance, and of course the repayment of the loan for all that. But the revenue would NOT start coming in immediately -- in fact, under normal circumstances it would likely be a couple of months after the job was completed before your (as the GC or sub) got paid.

                                            You seem to be arbitrarily lowering the dollar amount, perhaps believing it would be "easier" to borrow less money. In fact, you'll want to prepare a realistic cash flow projection that identifies exactly how much you need and when. That will be essential when making your case to a lender or investor. Trying to borrow a smaller amount doesn't increase your chances of getting a loan -- trying to borrow the RIGHT amount does.

                                            Also, check out the financial situation of the school you are proposing to do the work for. Districts across the county, including one in your area (according to Moody's) are in a financial crisis right now, just like everyone else. Their citizens passed bond issues for renovations and new construction, but even with good credit ratings, the schools have been unable to float those bonds (i.e., actually borrow the money) -- so their credit sources have tightened up, too. As a result, even projects that are already in progress are being delayed. It's possible that the job you'd be counting on is a long way from being "a bird in hand."

                                            All this may sound discouraging, but it isn't meant to be -- it's meant to be factual. Your endeavor requires adequate operating capital and solid risk management. Without it, you could very likely end up in an even deeper hole than now -- plus, as an employer, you'd be affecting other people and their families, too. Hopefully, all of the discussion in this thread is helping you move closer to the right solution.
                                • Re: How is it possible?? Credit lines with only business EIN?
                                  Lighthouse24 Ranger

                                  You wrote, "I have read a bunch of articles on the net about it being possible to get business credit cards and credit lines with only the business EIN." So how did THEY say to do it? The only reliable methods I know of all involve making your business creditworthy in some way (as you noted), which takes time. It sounds as though your need is urgent, so that may not be what you want to hear -- but I don't think there is a legitimate lender out there who will offer a loan to a brand new business without some type of security or guarantee. I do wish you the best, John, and hope you can find a good alternative to get your business going.
                                  • Re: How is it possible?? Credit lines with only business EIN?
                                    intechspecial Ranger

                                    CConcepts -

                                    Welcome to the community and good luck in your business venture.

                                     


                                    intechspecial
                                    • Re: How is it possible?? Credit lines with only business EIN?
                                      token88 Newbie
                                      CConcepts you say that you wont get your duns number for a few weeks? did you apply for a free number? If did makes sense it took me that long to get my duns number, but in order to get a paydex score you have to pay $320 to $350 to build a credit profile. When you pay for the credit profile you get your duns number imeadiatley. In the begining you are going to have to be a gaurantor for any business credit. Once your business reaches the magic number of 80 paydex score then you no longer have to be the gaurantor, and from what I was told by a dun & bradstreet rep you need 4 accounts in good standing to achieve an 80 paydex score. Another thing that is important is that your business has to be registared with the state that you do business in , this means filing a dba($20 bucks here in california) Publish your dba for a month(I payed $40 bucks for that) . I did everything through the www.dbastore.com to get that taken care of. They email & mail you copies of all the forms. When you open a business checking account they are going to want to see them. Hope this helps.