Barclaycard Black Card (or other high-limit cards) approval based upon documentation of performance.

[Anonymous]

Guys/Gals,

I'd like some advice from (hopefully) those in who have been in similar situations...  Optimally I'd like a revolving line of about $75k (either a LOC or high-limit card to replace various cards) Here are a few details below...

I own a product design/development firm.  I've been growing it for a number of years and have never (up until the past 2 years) had a NEED to leverage credit in my financial workflow, as I've always just relied on cash-on hand to cover my payables.  However, over the past 1-2 years I've decided that I can leverage and benefit from the rewards offered via a variety of rewards-based credit accounts, for money that I'm already spending.  In just the past year, I've amassed nearly 500k points on AMEX, 150k(ish) points on Chase, and others using this methodology.

I started from a (roughly) 500ish credit score, and over 2-3 years have managed to drive it up to around 700-750 on all 3 CBs.  However, in using these various revolving accounts I must "juggle" things to always ensure a low utilization (by paying prior to statement cut).  If I have projects that run "long" (receivables that come in over 60+ days) and allow the lines to show a balance, my score (due to a short history) swings WILDLY (up to 50-60 points based upon utilization alone).  I have documented spending of around $250-300k a year, over the past 2 years on credit (in addition to about $250k in spending directly from my primary checking for items which can't be billed on credit), with ZERO late payments over the entirety of my accounts...  In some cases I'm paying a $5,000.00 line down 3-4 times a month.  I've got Chase Sapphire Prefferred @ $20k and AMEX platinum @ $20k which I put the bulk of spending on (although I'm still paying them, in some cases, multiple times per month).   If my recievables drag out beyond the 30-day period, my lines will report as "maxed out" (despite the fact that I might have paid them down 2-3x in a given month), and my score swings wildly.

I've got a $40k line with "OnDeck" although the interest I pay to maintain it is obviously unreasonable given they are an "alternative lender"...  

Here are a few concrete numbers/info:

• Even with my score at it's "low point" (due only to utilization, which is the POINT of looking for a "buffer" Line of Credit) I'm **bleep** near 700+ on all three bureaus, with years of track-record showing ZERO late payments across multiple hundreds of thousands in spending annually.
• I did $592k in Gross Revenue last year ($1621.82 per day average)
• I've already done 215k in the first 100 days of 2018 ($2152.78 per day average), (most of which was during the first 60 days) showing nearly 30% growth already this year, over last year (to date)
• I have $450k in outstanding invoices on pretty much an ongoing basis.
• I have a 100% PERFECT payment record with every single creditor, shown over several years (with more than $250k+ average annual dollars paid across various TRADITIONAL revolving credit instruments via Chase, Barclays, and AMEX Platinum)
• I have $250k+ in annual spending via primary checking (for items not payable via credit instruments).
• I've drawn (and paid) more than $75k from Ondeck in just the past 18 months, despite the extremely high interest rates and mandatory weekly repayments.
• I've got $50-75k in liquid capital on-hand
• I have ZERO fullt-time staff (I generate this revenue via just myself, and a few 1099 contractors on an as-needed basis).

Ultimately I'm trying to find a $75k traditional LOC that will act as a "buffer" to cover my payables (payments to CLs like Chase, etc) monthly, so that I can garner the rewards from these instruments for money I'm already spending, but ensure that it's AVAILABLE to cover my accounts BEFORE statement-cut time (to avoid wild swings in my score and smooth my payment activity)...  

Any suggestions?  I know it's a lot of info, I'm sure I've left out things you might need to know to intelligently comment, so feel free to ask... I'm an open book looking for advice.

[Anonymous]

When was the last time you took a CLI on your Amex?  If it's at $20k, you could 3X CLI it to $60k.  With IV provided, that should be no sweat for you.  If you aren't comfortable providing IV, you could still take it to $30k-$35k which would help a little.  You could also apply for another Amex card, probably secure a $10k+ SL and then 3X CLI that later this year to $30k+.  Those are just a couple of Amex options.  As for other lenders, I'll let the others offer advice.

[Anonymous]

As I'm sure you know,  AMEX Platinum is technically "no limit" (which is BS, it's their internally calculated limit).  After doing $30-40k a month with them, they put me in "financial review" and set a "preset spending limit" of around $20k.  I've been doing 2-3x that in some months (since them) by paying multiple times per momth.  But, as I said, this is not only a HASSLE but because it's a "charge card" it doesn't let me float my payables more than 30 days at a time (really, less, since I pay it multiple times per month).  I'm trying to find a tradtional card or LOC that allows for $75-80k that will allow me to pay a reasonable interest rate to float that balance (in rare instances) up to 60-70 days as my payables come through on larger projects.

[Anonymous]

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@Anonymous wrote:

I started from a (roughly) 500ish credit score, and over 2-3 years have managed to drive it up to around 700-750 on all 3 CBs....

I have a 100% PERFECT payment record with every single creditor, shown over several years....

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Hi IU.  Those two things above don't completely jibe.  A 500 credit score is virtually impossible without late payments (or worse) on the report.  When a person first starts out (assuming no lates) he typically has a score in the upper 600s or even low 700s.

I'm also not clear whether your first account was opened 2-3 years ago or whether you have had accounts for several years.

A credit monitoring system (CMS) can sometimes erroneously tell you, on its front-end summary page, that you have "100% perfect payment history" -- based on looking at only the last 24 or 36 months (or possibly looking at only open accounts).  Credit Karma (I am told) can do that.

As you may realize, your top order of priority is to increase your score as much as possible before applying for any more cards, LOCs, or CLIs.  The higher score will increase the chance you will be approved.  Therefore the first thing I think you should do is pull all three credit reports at annualCreditReport.com, print them out, and then go over them minutely looking for any possible lates, collections, chargeoffs, and similar derogs -- which might be errors on your report or are things from 5-6 years ago.  Once you identify any that might be lurking, folks here can suggest some strategies for getting them removed.

Should there be no derogs (almost impossible given that you had a 500 score a few years ago) we can suggest some other strategies for maximizing your score.  At that point your idea of applying for an LOC or high-limit card might be a good idea.

[Anonymous]

I didn't realize your Amex was a no limit Platinum, I just saw your wrote $20k Amex in your original post.

I'd lean toward my second suggestion then to scoop up another Amex card, which you'll land at least a $10k SL then in 61 days you can 3X CLI it to $30k.  6 months later if you're willing to provide IV, you could take that limit as high as your profile will allow, which could land you in that target area you're shooting for. 

[Anonymous]

You said you own a firm? Not sure if you are incorporated or a DBA? Either way with your growth, you should be able to produce some excellent looking balance sheets & P & Ls. Then, take those to a nice local bank (maybe one you’ve already established a relationship with) and get a business LOC linked to your checking that you can advance on. You’ll have to reapply every year, but if you gain the trust of your bank they will hopefully stick by you in good and bad years. There’s no reason to pay credit card interest rates when you can get a LOC with a third the rate.

[Anonymous]

If you can’t do that for whatever reason, I recommend talking to SmarterFinanceUSA out of Las Vegas. I found them recently to finance some older and oddball equipment, and I know they help newer businesses find workable rates.

[pipeguy]

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@Anonymous wrote:
You said you own a firm? Not sure if you are incorporated or a DBA? Either way with your growth, you should be able to produce some excellent looking balance sheets & P & Ls. Then, take those to a nice local bank (maybe one you’ve already established a relationship with) and get a business LOC linked to your checking that you can advance on. You’ll have to reapply every year, but if you gain the trust of your bank they will hopefully stick by you in good and bad years. There’s no reason to pay credit card interest rates when you can get a LOC with a third the rate.

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+100

Given you have an ongoing $450k in "receivables" you should have NO problem getting a business LOC for at least $100k. Using credit cards to finance your business is a disaster in waiting - APR, Credit Reporting, etc. - if X-amount of your invoices don't get paid, you can't pay your credit card "line of credit" on time, then everything goes south. 

Note too that I'm glad no one offered a suggestion on "Barclay's Black Card" because that's a total waste of money - you want to minimize your expenses and paying annual fees just adds to your overhead (perhaps one AF card if you travel a lot, but do the math).

Carrying $450k in receivables on a business that does  $592k gross or even a million in sales is also out of wack - a lot of companies offer 2%/10 and many add 2% per month on over 30.

You need to get your receivables way down and your turn over up. I don't know what your gross/net profit is (doesn't really matter) if 75% of your gross business is being "lent out or basically consigned" you are out of business and bankrupt if only a few of those receivables go south on you. 

I speak as a small business owner for 18 years (went broke in 2005-06) and I was doing twice your current gross - market changed faster than I did and that was followed by the "crash" of 2006-2008. 

[Anonymous]

As others have said a Line of Credit from a bank you do business with regularly is probably you best bet. Trying to float you business on multiple credit cards is not the way to go. And wow $450K in receivables is quite a bit in reference to your total revenue. Sounds as if you are essentially extending credit to all of your clients. As has been said if just a few of those don't get paid you could be in a world of trouble.