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Stop what you're doing. Get a line of credit.

Ronak

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I went with PNC.

Most of the banks want 3 years in business or more, which I'm guessing they check based on the LLC incorporation date.



PNC.

And a 6% rate for business is pretty good.

PNC Business Banking

According to the website, no collateral required, and only need gross revenue numbers.

Was this your experience, or did they ask for detailed financials? The local banker here seemed to think docs were required even though the website doesn't mention it.


PNC Business Banking
 
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Ronak

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If you are drop shipping, fine no problem. But even in an e-commerce business (self-fulfilled) like mine where I send $30K+ to china every month to buy inventory you need credit. I have an Amex platinum and an Amex Gold card to handle my float with an unlimited line of credit. (I say that because they don't tell you a limit).

What happens when Q4 rolls around and I want to be prepared for BFCM? Now I need to order $100K worth of product if I really want to smash Q4.

What if Amex decides that I am only worthy of 50K? Now, I'm screwed. And keep in mind I am small potatoes!

You don't understand because you are not speaking from experience.

How do you use your AMEX to pay China?
 

Scot

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PNC Business Banking

According to the website, no collateral required, and only need gross revenue numbers.

Was this your experience, or did they ask for detailed financials? The local banker here seemed to think docs were required even though the website doesn't mention it.


PNC Business Banking

Any local banks you know of? Suncoast Credit Union turned me down. Meeting with my Chase banker tomorrow. But have a feeling I’ll probsbly go through several banks before one approves me.
 

IGP

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How do you use your AMEX to pay China?

Hook an AMEX to Paypal and then use that credit card to pay with Paypal if your factory accepts Paypal.

Bam! - Double or triple points on your inventory costs!

I typically pay with Paypal, send a wire or use Alibaba if the client insists, in which case I pay with a Visa.
 
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ChrisR

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Any local banks you know of? Suncoast Credit Union turned me down. Meeting with my Chase banker tomorrow. But have a feeling I’ll probsbly go through several banks before one approves me.

I tried Chase Bank a few weeks ago and they were totally useless. I was told the only way I'd get approved is if my business was in the medical field. I've been banking with them for almost 20 years with credit over 800 and they more or less wouldn't give me the time of day.
 

IGP

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I tried Chase Bank a few weeks ago and they were totally useless. I was told the only way I'd get approved is if my business was in the medical field. I've been banking with them for almost 20 years with credit over 800 and they more or less wouldn't give me the time of day.

Get a different bank or better negotiating skills.
 
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W. Sabria

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I used Citibank for a Personal Line of Credit. I applied via phone and got approved right away. The whole process took about an hour. They gave me a variable interest rate of 11.49%. I may not end up using this, but I agree it's good to have.

Next up is getting one for my business! (While probably start with Chase for this one)
 

IGP

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This just popped up in my Amex account. Seems like they are willing to get people prepared for Q4...
hhFLg4O.jpg
 
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Scot

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This just popped up in my Amex account. Seems like they are willing to get people prepared for Q4...
hhFLg4O.jpg

Hmm.. I didn’t get that one. I hope they send me one though.
 

DrkSide

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I've got a couple LOCs for a couple different businesses. They have been invaluable for growth and are a great tool. Most banks will want some type of collateral when you get one and I haven't seen any that will do an unsecured line at all.

Inventory Secured: Line secured by the value of the inventory. I have one now that will cover 50% of my cost of the inventory. If I want to purchase 50k I only have to have 25k of my own cash for the order. Working with a bank now that will go up to 80% of the cost.

Real Estate Secured: Line secured by the property. Line is dependent on the value of the property but there are no restrictions for using the money. Working on a master line right now where the bank will add in the value of new properties to the line instead of having multiple lines.
IE. Purchase a property for 60k cash (pulled from line of credit) and the bank appraisal comes in at 75k. They will add 63.75k to my line (85% of appraisal) so I can purchase the next property.

For those of you that just have credit cards. Look at a service called Plastiq that allows you to pay with a credit card even where they are not accepted. You can even pay suppliers overseas with it. The drawback is a 2.5% fee (which can somewhat be negated with a 2% cash back rewards card).
 

Ronak

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Just applied for PNC, didn't take long at all. We'll see how it goes.
 
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Ronak

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Any local banks you know of? Suncoast Credit Union turned me down. Meeting with my Chase banker tomorrow. But have a feeling I’ll probsbly go through several banks before one approves me.

Have you tried the SBDC's and SCORE chapters around town?

Also, be careful about going to several banks, everytime they run credit, it dings your score.
 

Ronak

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@Scot
  • Wells Fargo Small Business Advantage® Line of credit: Ideal for businesses in operation for less than 2 years.2

Also no collateral. Worth a shot.
 

Scot

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@Scot



    • Wells Fargo Small Business Advantage® Line of credit: Ideal for businesses in operation for less than 2 years.2
Also no collateral. Worth a shot.


Nice! I’ll check them out if Chase lets me down.
 
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Ronak

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Just applied for PNC, didn't take long at all. We'll see how it goes.

Rejected.

7 Figures in Revenue, profitable, upward growth trend, in biz 4 years, good personal/biz credit scores, but they cited high utilization on existing credit lines.

Bummer, wasted a credit pull on these clowns.
 

Patrickg

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I went through chase no problem. FYI there threshold is 100,000 so if you apply for 95,000 let's say all they want is last years business tax return. Not to bad.
 

Scot

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I went through chase no problem. FYI there threshold is 100,000 so if you apply for 95,000 let's say all they want is last years business tax return. Not to bad.

How long did it take to get a reply? It’s been 6 business days waiting on the underwriter.
 
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Patrickg

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How long did it take to get a reply? It’s been 6 business days waiting on the underwriter.

I can't remember exactly but it was over a
Week.
 

luniac

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taking out a loan scares the hell out of me, like gettin my legs broken.
 

Scot

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I guess we need to get a different bank or better negotiating skills ... :smuggy:

Negotiating skills mean jack when the underwriter is a faceless drone in some corporate cubicle farm who you don’t get access to.

Question to the thread. Who here has actually successfully obtained a LoC with a business less than 1 year old and less than $100k in revenue?
 
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Vigilante

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If your business with Amazon is ever significant enough... I used Amazon Lending. Their interest rates were egregious but the approval process was almost instantaneous. At the maximum I had extended over six figures only secured probably buy the Amazon FBA inventory that I had at the time. It was very expensive but very easy. However, you have to wait for them to offer it to you. There are no restrictions on how you could use the money.

When I sold the company one of the terms of sale was at the purchaser paid off the Amazon lending agreement.

This won't be a solution for a lot of people but for those of you who have a significant Amazon Centric business this was very easy access to Capital.
 

IGP

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If your business with Amazon is ever significant enough... I used Amazon Lending. Their interest rates were egregious but the approval process was almost instantaneous. At the maximum I had extended over six figures only secured probably buy the Amazon FBA inventory that I had at the time. It was very expensive but very easy. However, you have to wait for them to offer it to you. There are no restrictions on how you could use the money.

When I sold the company one of the terms of sale was at the purchaser paid off the Amazon lending agreement.

This won't be a solution for a lot of people but for those of you who have a significant Amazon Centric business this was very easy access to Capital.

Same with Shopify. If you are doing decent volume, they will lend you the money and take a percentage off your sale until it is paid back. The rates were terrible though.

Paypal has sent me lending offers as well.
 

IGP

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Negotiating skills mean jack when the underwriter is a faceless drone in some corporate cubicle farm who you don’t get access to.

Question to the thread. Who here has actually successfully obtained a LoC with a business less than 1 year old and less than $100k in revenue?

Are you actually going into the bank to talk to a banker or are you applying online?

If you are applying online to a faceless drone of course you have no negotiating opportunities as you are not even talking to someone.

If you have any collateral (a home for example) and you go in and talk to someone at your bank with whom you have a mortgage, that's going to increase your chances in a big way.

It may be you have to personally guarantee it or provide some other collateral, but at least you have the opportunity to talk and negotiate.
 
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Scot

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Are you actually going into the bank to talk to a banker or are you applying online?

If you are applying online to a faceless drone of course you have no negotiating opportunities as you are not even talking to someone.

If you have any collateral (a home for example) and you go in and talk to someone at your bank with whom you have a mortgage, that's going to increase your chances in a big way.

It may be you have to personally guarantee it or provide some other collateral, but at least you have the opportunity to talk and negotiate.

Chase doesn’t have in house underwriters. I had meetings with the area business liaison and the local branch business banker. The banker actually uses my dressing and is on my diet. Trust me, they were sold. But then LoC gets handed off to a random processor who hands it off to the underwriter. No one that I’m actually able to talk with has any influence on the decision.

I personally guaranteed the LoC. But time in business and revenue were cited as the reasons for denial.

I guess I need to start talking to local banks that only have a couple of branches.
 

IGP

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Chase doesn’t have in house underwriters. I had meetings with the area business liaison and the local branch business banker. The banker actually uses my dressing and is on my diet. Trust me, they were sold. But then LoC gets handed off to a random processor who hands it off to the underwriter. No one that I’m actually able to talk with has any influence on the decision.

I personally guaranteed the LoC. But time in business and revenue were cited as the reasons for denial.

I guess I need to start talking to local banks that only have a couple of branches.

Ya, that's probably a good idea. Another alternative is personal lending if you know any one that has a private equity company maybe they will give you a shot, although they typically look for juicy deals.
 

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