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What to do?

Valued Contributor

What to do?

Okay so here's the situation:

Personal FICO 730

Time in Business 9 months

We have 10.5k of debt in business credit cards and next month they start charging interest (the 0% intro ends). Rates are 18-20% which is steep, we got the cards when personal FICO was 670.

We've tried to get a Business LOC but the ones we've seen are asking 18% which is crazy, or requiring a minimum of 2 years in business.

I'm thinking of maybe getting a personal LOC at 8-10% for the 10k and just loaning my business the money. It only needs to be for 4-6 months then it should be PIF, but in the meantime at 20% I'm getting charged about $200 a month just in interest Smiley Sad

Any thoughts or alternatives?
Message 1 of 7
6 REPLIES
Community Leader
Super Contributor

Re: What to do?


Matt4200 wrote:
Okay so here's the situation:

Personal FICO 730

Time in Business 9 months

We have 10.5k of debt in business credit cards and next month they start charging interest (the 0% intro ends). Rates are 18-20% which is steep, we got the cards when personal FICO was 670.

We've tried to get a Business LOC but the ones we've seen are asking 18% which is crazy, or requiring a minimum of 2 years in business.

I'm thinking of maybe getting a personal LOC at 8-10% for the 10k and just loaning my business the money. It only needs to be for 4-6 months then it should be PIF, but in the meantime at 20% I'm getting charged about $200 a month just in interest Smiley Sad

Any thoughts or alternatives?

If it is only for the stated time then I agree with the option - in blue.  Your time in business is what is really limiting you.  Once you are over that hurdle, things should get easier in getting a business loan.

 

What State are you in?  Depending on your state, new businesses considered in the start-up can get small loans.  For example in CT, you can loan for as low as 4% for your new small business.

 

Update on what you decide to go with.

Message 2 of 7
Valued Contributor

Re: What to do?

Yeah, any business loans that accept people under 2 years in business (that I've seen) will accept people above 600 FICO, but at 15% minimum. So even if you have a 760 FICO the lowest rate they'll give you is 15% which is really high.

That's the main reason I'm considering this route. Our business is in MN. I'm 99.99% sure that after the holidays we'll be no longer operating in the red.

Are there any (good) alternatives or would this be the best option?
Message 3 of 7
Established Member

Re: What to do?

Did you ever find any business or personal loans that approve without poi or tax returns?
The percent isn't a big deal just being approved.
Message 4 of 7
Highlighted
Valued Contributor

Re: What to do?

It depends on the amount you're requesting for just 10k they're unlikely to request POI of Tax Returns, for 50k they're likely to request it. Mainly depends on your FICO.
Message 5 of 7
New Member

Re: What to do?

With a 730 score why not just get another 0% balance transfer card under your personal credit, Citi Simplicity is 18 months, I think. Or if you're under 5/24 try chase ink business..

Message 6 of 7
Valued Contributor

Re: What to do?

I have both Chase Ink cards, Also their BT fee is 5%.

Decided to BT to my personal BofA and "loan" my business the funds.
Message 7 of 7