The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
Buying and selling real estate for commercial purposes can be an expensive endeavor. Many real estate investors typically have to start out using their own funds or personal credit to cover the cost of their new properties, even when they’re for generating income. This strategy works well for those who have the personal capital to make big purchases, but for those who don’t, it can be a roadblock for them. If you have the knowledge and skills for real estate investing, but not the cash flow, it can prevent you from becoming an investor. In these cases, business credit can be a solution to the problem.
Business credit is like personal credit, but based on the financial wellbeing of your company. It’s used to determine whether financial institutions should lend money to or do work with your business. Establishing business credit can take some time. Your score reflects your payment history, risk, and how likely you are to remain in business. Dun & Bradstreet offers a business credit that’s ranked from 0 to 100, and 80 or higher is excellent.
Even if you don’t intend to use it, business credit is essential to maintain. It can provide opportunities in the future. It can allow you to receive financing and helps move away from business owners utilizing their own credit and personal funds for big purchases, like commercial real estate.
Business credit is an excellent option for real estate investors and can become a source of financing to continue purchasing real estate.
There are a few different ways to do this. A business line of credit can be a source to purchase a property, depending if your business qualifies for a line large enough to support a real estate purchase. Interest rates are also based on your business’s income and risk and will likely be higher than using a mortgage loan to purchase. Business owners can also use business credit cards to purchase properties, also depending on if they qualify for a credit line that can support a real estate purchase.
A credit card will likely have higher interest rates, but plenty of credit options have great rewards that might be worth some thought. The business credit card can also be used for other expenses.
Finally, some real estate investors may qualify for a loan through the SBA or Small Business Administration. 504 loans offered by the SBA, allow the purchase of existing buildings if your business meets certain criteria. If an SBA loan is something you want to consider, contact a certified SBA lender to see if you qualify for that option.
Here are the steps to building your business credit:
Building your business credit in order to purchase real estate is a significant benefit to many business owners. Finding a professional realtor who can help you once you have the business credit to purchase a property is critical.
September 13, 2021
Uncategorized
August 4, 2021
Uncategorized
January 28, 2021
Uncategorized