Are there Business-focused Personal Loans?

CBetc · ‎09-19-2021

Kind of a weird question, but have two business credit cards through Chase that are under my name (not an LLC's) but obviously don't report to the bureaus. With business finally on the upswing, I'd like to refinance this debt into a loan so I'm not paying high interest on the balances. A personal loan would do it, but it would result in this debt magically showing up on my personal credit. As I'm hoping to do a re-fi soon, that's not ideal.

So basically: Is there any equivalent for a regular personal loan, but that's focused on business debt, either as a DBA or under your SSN? I'm completely fine with a PG, I'd just prefer it not to show on my personal file if it's business/startup related. I've looked at Business Loans (Funding Circle, Paypal, etc) and they are geared for LLC's first. Without much revenue to show during pandemic years, I'm not sure that would be a good fit.

jaxstraw · ‎09-19-2021

@CBetc wrote:
Kind of a weird question, but have two business credit cards through Chase that are under my name (not an LLC's) but obviously don't report to the bureaus. With business finally on the upswing, I'd like to refinance this debt into a loan so I'm not paying high interest on the balances. A personal loan would do it, but it would result in this debt magically showing up on my personal credit. As I'm hoping to do a re-fi soon, that's not ideal.

So basically: Is there any equivalent for a regular personal loan, but that's focused on business debt, either as a DBA or under your SSN? I'm completely fine with a PG, I'd just prefer it not to show on my personal file if it's business/startup related. I've looked at Business Loans (Funding Circle, Paypal, etc) and they are geared for LLC's first. Without much revenue to show during pandemic years, I'm not sure that would be a good fit.

Most business loans are going to be revenue based criteria. They are going to want to see tax returns or bank statements. And with not much revenue the past year that is a potential problem.

Have you considered a business credit card with a balance transfer offers like US Bank or Wells Fargo ? They offer 0% for something like 12-18 months.

Jax

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CBetc · ‎09-20-2021

@jaxstraw wrote:
Most business loans are going to be revenue based criteria. They are going to want to see tax returns or bank statements. And with not much revenue the past year that is a potential problem.

Have you considered a business credit card with a balance transfer offers like US Bank or Wells Fargo ? They offer 0% for something like 12-18 months.

Yeah, that's definitely my concern. This is all legitimate business debt of course, but not all to either specific one of the LLCs, more just equipment purchase, investigating options while operating as a DBA, etc.

I have an app open now for a business LOC for one of the LLCs with WF, but would be okay (reluctantly) with a secured line for that since it's a fresh LLC. But yeah, a straight-up business BT card might be the best option here rather than going with a consolidation loan per se. Thanks for the tip.

Daddy2U · ‎01-20-2022

Why don't you just start your LLC up, finally?

Citylights18 · ‎01-20-2022

Talk to BHG. They will give you a general purpose business loan and a business credit card. Business loan up to 200k if you have the DTI to support.

CBetc · ‎01-25-2022

@Daddy2U wrote:
Why don't you just start your LLC up, finally?

I'm in the process of doing that (yay 2022), but there still isn't enough revenue booked to show for it that it'd pass a real funding analysis. Hopefully that changes, but not quite there yet.

For now, I've managed to balance this debt equally across a lower-interest business LOC (with PG) and a balance transfer to another business credit card. Not ideal, but it does work.

I still feel like this is an open niche for a company that would be willing to take on this kind of risk.

CBetc · ‎09-11-2023

@Citylights18 wrote:
Talk to BHG. They will give you a general purpose business loan and a business credit card. Business loan up to 200k if you have the DTI to support.

Just to raise this thread from the dead, that's exactly what I ended up doing recently, after getting a cold call from them. Although the rate is high (wish I'd done this two years ago), it fills this niche perfectly. Consolidation loan is a PG, but doesn't show on personal credit (just the HP). Very simple process, too. Just proof of personal income (does not have to be from the business in question) and a few months of bank statements.

See https://ficoforums.myfico.com/t5/Personal-Finance/BHG-I-applied-approved-200K-Any-other-experiences/...

Citylights18 · ‎09-11-2023

I recently talked to BHG for a second business loan so have a few points to add.

-Requires what they call is a personal guarantee. The personal guarantee is based on the amount you sign up for and also your age. You can opt out of the peronal guarantee if you have a preexisting Term or Whole Life policy. That life insurance policy needs to be roughly 4 times the value of your loan and BHG woud require a lien against that policy so you are the first payable. Given the BHG personal guarantee doesn't require a physical exam it likely makes sense just to go with it rather than take out a policy. Its more than what you'll pay for a Term in prime health but cheaper than life insurance with pre-exisiting condition.

-Loans are now being offered with a 24 or 60 month lock up period. Considering you'll end up paying about 3 times interest on any loan not being able to pay it off for 2 to 5 years is a nuisance. My old loan didn't have a lock up period which is nice but I've kept it open instead of paying on it. BHG would allow me to pay my exisiting loan off if I wanted to with a new loan. Didn't however seem to make financial sense.

-Payments are due 30 days plus whatever day you start the month. If you sign off for example September 15th your fist payment will be November 15th however they want you to pay a "per diem" amount of interest between September 15th and September 30th so you don't get a free couple of extra weeks. It might make best sense to take posession at the start of a new month to avoid the per diem. However the per diem can be negotiable against the doc fee.

-My advice would be not to take out a loan earlier than what you have to do so because it starts the clock on payments. This is not like a line of credit where you can sit on it a couple of years before taking money out on it. Also don't take it out until you have all contingency plans figured out in case the business fails. Will you be taking the money eventually for owners draws and self employment tax? Where will the money to pay for the business loan monthly payments come from? Myself I went through this exercise and found it valuable.