This document discusses 15 ways for real estate investors to obtain business credit, loans, and lines of credit. It begins by providing background on real estate investing and how house flipping has increased in popularity. It then explains why traditional lenders may not provide funding for high-risk real estate deals and outlines alternative options for financing flipping projects including unsecured credit, cash flow lending, merchant cash advances, securities-based lines of credit, 401(k) financing, and house flipper financing. It stresses the importance of building business credit over time by starting with vendor and store credit cards and lines of credit. Government grants are also mentioned as a source of free funding for real estate projects.
15 Easy Ways to Get Business Funding for Real Estate Investing
1. 15 EASY WAYS TO
GET BUSINESS CREDIT,
LOANS, AND CREDIT LINES FOR
REAL ESTATE INVESTING
2. Ty Crandall
Chief Executive Officer
(877) 600-2487
info@creditsuite.com
Get Approved for Funding www.creditsuite.com/getfunding
3. REAL ESTATE AS AN
INVESTMENT
• It’s nothing new. Real estate investing has been
around for thousands of years.
• It predates stock markets and other methods of
trading and valuing wealth.
• Land used to be the best sign of anyone’s wealth.
Why? Because land is permanent.
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4. FAST FORWARD
TO TODAY
• While renting out real estate investments
remains a popular way to profit from land and
buildings, the real money and the real
numbers are in flipping.
• Buying low and selling high in rapidly changing
markets, and fixing up rehabs for profit is all
the rage.
Get Approved for Funding
www.creditsuite.com/getfunding
5. JUST HOW POPULAR IS
HOUSE FLIPPING?
• According to the Real Wealth Network
(https://www.realwealthnetwork.com/learn/ne
ws/house-flipping-hits-new-records-united-
states-2016/), 2016 was a banner year for
flipping in the United States.
• As in, 6.6% of all single family condo and
home sales were flips.
6. FUNDING ALL THAT
FLIPPING
• Turning to business credit to get the money to flip
is a smart business choice.
• And you might be tempted to try a traditional
lender or credit provider, like a bank or a credit
union.
Get Approved for Funding www.creditsuite.com/getfunding
7. DON’T BOTHER
• Credit unions, and commercial lenders like
banks will most likely not loan to you,
unless your credit is impeccable and you
have been in business for a long time.
• Why? Because real estate and other
financial industries are considered to be
high risk.
Get Approved for Funding www.creditsuite.com/getfunding
8. THE SBA CAN’T HELP
• The Small Business Administration does
not actually loan money. Instead, they set
loan guidelines.
• Because the SBA guarantees these loans,
rates are more favorable; terms are more
flexible
• The SBA says real estate investing is too
high risk for them.
Get Approved for Funding www.creditsuite.com/getfunding
9. DELAYS CAN BE COSTLY
• If you had to wait around until your bank or credit
union would feel comfortable enough to give you
a loan or extend credit, you’d be waiting a long
time.
• And you would be missing out on opportunities.
• Fortunately, you’ve got other options.
Get Approved for Funding www.creditsuite.com/getfunding
10. TRYING OTHER OPTIONS
• Banks and credit unions got you down?
• They aren’t the only lenders out there
• According to the US Department of Revenue, most
business loans and credit lines that are available
today don’t come from big conventional banks
• Here are some more options that you can try and
that are proven to work.
11. HOW WE CAN HELP
• We work with all legitimate types of funding
programs that are available today, offering
funding through hundreds of investors and
lenders through a multitude of different funding
programs
• So, we know the solutions that can help you
succeed.
12. 15. UNSECURED CREDIT
• Access up to $150,000 in unsecured credit with
0% rates that you can secure even as a startup
• Unsecured credit is offered without the need for
collateral or a show of assets for approval.
• Instead, the loan (credit) is based on the
borrower’s promise to repay.
13. UNSECURED CREDIT
• A 0% program is perfect for high-risk industries
like real estate investments.
• It’s perfect when you are getting started, too.
Get Approved for Funding www.creditsuite.com/getfunding
14. • You can get credit lines to
take cash out of.
• These accounts report to
the business credit
reporting agencies –
thereby helping you build
your business credit.
UNSECURED CREDIT
Get Approved for Funding www.creditsuite.com/getfunding
15. • Even startups can be approved!
• You don’t need collateral or a
show of cash flow; you just need
a 680 or better credit score.
• You do not even need a
guarantor.
UNSECURED CREDIT
Get Approved for Funding www.creditsuite.com/getfunding
16. 14. BUSINESS REVENUE LENDING
AND CASH ADVANCES
• It’s not a loan
• Business revenue lending (AKA cash
flow financing) is an advance based
upon the expected future sales and
revenues of a business.
• We can get you 72 hour funding.
Get Approved for Funding www.creditsuite.com/getfunding
17. 13. CASH FLOW FINANCING
• Cash flow financing is one of
the more popular types of
business financing today
• This is fast and easy money!
• All that is needed for approval
is a 6-month bank statement
review.
Get Approved for Funding www.creditsuite.com/getfunding
18. • You can typically get approval for 10-12% of your annual
revenue
• $600k in annual revenue = $60k loan
• $400k in annual revenue = $40k loan
• There are no collateral requirements!
• Lenders will often lend to as low as a 500 FICO score, and some
lenders don’t have credit requirements at all.
CASH FLOW FINANCING
19. QUALIFYING FOR CASH FLOW
FINANCING
• Typically, you need to be in business for at least a
year.
• You should have revenue of over $10k monthly.
• You will need to have more than 10 monthly
deposits.
• You need a positive bank balance at the end of
each month.
20. BENEFITS OF CASH FLOW
FINANCING
• Once you have paid back ½ of your loan, you will
be offered another loan.
• Terms will get longer, and the rates will get better.
• Over 70% of funded customers will come back
and get more money
Get Approved for Funding
www.creditsuite.com/getfunding
21. 12. MERCHANT
CASH ADVANCES
• Similar to cash flow financing, but
only credit card deposits are
counted.
• Qualifications tend to be easier.
• In some cases, you will only need
$5k in deposits to qualify.
Get Approved for Funding www.creditsuite.com/getfunding
22. 11. SECURITIES-BASED
LINES OF CREDIT
• Got stocks and bonds?
• You can use them as collateral to
get business credit.
• Rates are usually less than 5%
• There are NO cash flow or
consumer credit requirements.
Get Approved for Funding www.creditsuite.com/getfunding
23. • You don’t need bank statements or
tax returns for approval.
• You will still earn interest on the
stocks and bonds that you have.
• You can use any stocks you
currently own as leverage to get
business financing.
SECURITIES-BASED
LINES OF CREDIT
Get Approved for Funding www.creditsuite.com/getfunding
24. SECURITIES-BASED
FINANCING
• Borrow as much as 90% of the value of your stocks.
• You will continue to earn interest on any stocks you
are pledging as collateral.
• Closing and funding takes less than three weeks
25. 10. 401(K) FINANCING
• Use your existing 401k or IRA as collateral for business
financing.
• IRS proven strategies with no tax penalties.
• Plus you can still earn interest on your 401k and pay low
rates, often less than 5%.
• Close and fund in less than 3 weeks.
• Get up to 100% of what you can roll over within your 401k.
26. • There are NO consumer
credit score requirements.
• Even a startup business can
be approved.
• You don’t need a tax return
or a bank statement review.
401(K) FINANCING
Get Approved for Funding www.creditsuite.com/getfunding
27. • Get approved for a loan equal to 100% of the
value of the 401(k).
• The idea is that you are investing your 401(k) in
your own business.
• This is instead of buying stocks in other
businesses.
• There are no tax ramifications!
401(K) FINANCING
28. 9. ACCOUNTS RECEIVABLE
FINANCING
• Use your outstanding accounts receivable for
financing.
• Get as much as 80% of your receivables
advanced to you in less than 24 hours.
• The remainder of the accounts receivable will
be released once the invoice is paid in full.
29. ACCOUNTS RECEIVABLE
FINANCING
• Closing takes two weeks or less
and the factor rates are as low as
1.33%.
• However, your receivables should
be with the government or
another business.
Get Approved for Funding www.creditsuite.com/getfunding
30. ACCOUNTS RECEIVABLE
FACTORING
• Accounts Receivable financing/factoring is ideal
for any business which receives orders to fulfill,
and isn’t paid for weeks or even months later.
• With Accounts Receivable financing, you can get
up to 80% of your receivables advanced to you
within 24 hours.
31. • The remaining 20% is advanced to you after the invoice is
fully paid.
• There are NO consumer credit requirements and there are
NO cash flow requirements for approval.
• Rates are VERY low, as low as 1.25% discount.
• You should be in business for one year or more.
ACCOUNTS RECEIVABLE
FACTORING
32. 8. HOUSE FLIPPER FINANCING
• Get 100% of the financing you may need to purchase and
rehabilitate residential properties.
• Lenders will loan up to 65% of after-repair value.
• You can usually get a 6-month term, or get an extension if
you need one.
• Rates range from 8% and up.
33. HOUSE FLIPPER FINANCING
• You will need to have a 660+ FICO score for
approval.
• Lenders will want you to have flipping experience.
• You will need to have cash on hand to put into an
escrow account.
Get Approved for Funding www.creditsuite.com/getfunding
34. HOUSE FLIPPER FINANCING
• Use the real property as collateral
• Funds in a house reseller program are available for short-
term residential purchase and renovation projects
• Most traditional banks and credit unions will not approve.
• Authorized money is then held in escrow and released in
draws as your contractors complete renovations
35. BUILDING BUSINESS CREDIT
• Don’t have a good enough
FICO score to qualify for some
of these options?
• Then it’s time to start building
business credit.
• The first step is easy.
Grab Your Free Business Credit Building Guide
www.creditsuite.com/EIN
36. 7. VENDOR CREDIT
TO THE RESCUE!
• One easy method of getting started in building credit is
what’s called vendor or trade credit
• If you get your coffee from the same supplier every
month, why not ask for trade credit on future purchases?
• Not every vendor reports trade credit to the credit
bureaus, so find out if your vendor does and act
accordingly
37. WHY VENDOR CREDIT?
• Vendor credit is often very easy to
get
• It establishes a relationship with
your company and the vendor
• It often supports a local business
• Get your first 5 credit accounts
through vendor credit and get the
ball rolling
Grab Your Free Business Credit Building Guide
www.creditsuite.com/EIN
38. TRADE REFERENCES
According to Dun & Bradstreet
(http://www.dnb.com/perspectives/finance-credit-
risk/what-is-trade-credit-and-how-can-it-help-your-
business.html), suppliers reporting their positive
experiences to the credit reporting bureaus are
creating what are called trade references.
39. • Trade references can often give
potential lenders a clearer perspective
on your ability to pay back
• This is information beyond just the
numbers
• It can make it clear if you engage in
risky practices, such as putting off
paying your suppliers to pay utilities.
TRADE REFERENCES
Grab Your Free Business Credit Building Guide
www.creditsuite.com/EIN
40. GOING PAST
VENDOR CREDIT
• Next up is store credit
• Once you have established
decent vendor credit, your
business should be able to
qualify for store credit
Grab Your Free Business Credit Building Guide
www.creditsuite.com/EIN
41. 6. STORE CREDIT
• When you were building personal credit, some of
the first places to send you credit offers were
probably businesses
• The same can work for business credit
• Got credit with home improvement stores like Lowe’s
or Home Depot?
• Then use it for real estate fixes and flips
42. BUYING WHAT
YOU DON’T NEED
• Sometimes, in order to establish good store credit,
you are just going to have to buy some things you do
not need in order to get a history going
• Why not donate those goods to your community?
• When you get store credit at home
improvement stores, your purchases
can be more practical for your real
estate investment
43. 5. FLEET CREDIT
• Next, you can get fleet credit
• Fleet credit is a credit card which allows your
business to maintain a set of vehicles
• These are usually fuel cards, and they can be used
to purchase fuel, repairs, and maintenance
• You might provide fleet cards to all of your
business’s drivers for their company use
44. MORE TRADE ACCOUNTS
• Keep going with trade accounts
• Consider all of the vendors you work with
regularly, and open trade accounts. Try:
• Office supplies
• Cleaning services
• Caterers
• Vehicle repairers
• Etc.
• You’re working toward 10 or more trade accounts
45. 4. QUALIFYING FOR
CASH CREDIT
• A cash credit is a short-term cash loan to a
business.
• The lender provides this type of funding, but
only after getting the required security to
secure the loan.
Grab Your Free Business Credit Building Guide
www.creditsuite.com/EIN
46. CASH CREDIT
Once security for repayment is given, the
business receiving the loan can continuously
draw from the bank up to a certain specified
amount.
Grab Your Free Business Credit Building Guide
www.creditsuite.com/EIN
47. 3. BUSINESS
CREDIT CARDS
• Business credit cards are another funding option
• Like personal credit cards, business credit cards must be paid off
in a timely fashion
• Business credit utilization should be kept below 30% of total
available credit
• Late and incomplete payments will impact your business credit
score directly
48. BUSINESS CREDIT CARDS
• You can get HIGH-limit credit cards in your business name which are
linked to your business EIN with no consumer credit inquiry.
• There are no cash flow or collateral requirements.
• You can get immediate vendor credit approvals.
• Get high-limit store credit within 30-90 days.
• Get high-limit cash and fleet credit within 120-180 days and auto
vehicle financing.
49. 2. BUSINESS
CREDIT LINES
• A business credit line differs from
a business credit card in that it is
more like a debit card.
• You can borrow up to a certain
limit, and then you only pay
interest on the money you have
borrowed.
Get Approved for Funding www.creditsuite.com/getfunding
50. BUSINESS CREDIT LINES
• You can draw and repay
funds, so long as you do
not exceed your credit limit.
• A business line of credit is
for several purposes, not
just one, like with a business
loan.
Get Approved for Funding www.creditsuite.com/getfunding
51. 1. CROWDFUNDING
• Sites for crowdfunding include Kickstarter and IndieGoGo.
• This funding gathers money from a “crowd”, or a lot of
people instead of one big investor.
• If the crowd likes your idea, they may decide to donate
money to your project.
• Generally, crowdfunding doesn’t need to be paid back.
• A good pitch is key to successful crowdfunding.
52. CREDIT HISTORY AND
MANAGEMENT
• With all types of credit and financing,
remember:
• Don’t borrow more than you can pay
back
• Pay back as much as you can, as
quickly as you can
• Keep thinking of ways to improve and
increase your available business credit
Get Approved for Funding www.creditsuite.com/getfunding
53. BONUS: GRANTS
• Did you know that the government hands
out grants for real estate investors?
• A grant is a lot like a scholarship
• It’s free money
• You do not have to pay it back
Get Approved for Funding www.creditsuite.com/getfunding
54. FINDING GRANTS
• The government has a searchable database of
available grants, at: https://www.grants.gov/
• Search under keywords like:
• Housing
• Homeless
• Infrastructure
• Terms like house, rehabilitation, and structure get
you too many unrelated results
55. ACT QUICKLY FOR
GRANTS
• Grants often close quickly
• Many are available only for a few
months
• You can apply for more than one
grant at a time
• Fill out the application thoroughly
and as correctly as you can
Get Approved for Funding www.creditsuite.com/getfunding
56. HUD GRANTS
• Search for HUD grants here:
https://portal.hud.gov/hudportal/HUD?src=/program_offic
es/spm/gmomgmt/grantsinfo/fundingopps
• NOFAs (Notices of Funding Availability) include the
contact where you send your application
• If you apply for more than one HUD grant, it must be a
separate application under the correct NOFA
57. STATE AND LOCAL
GRANTS
• Your state or local government might provide grants for
housing
• Offer a partnership to your state, city, or town
• Ask for local government support for your project
• Most municipalities want neighborhoods to be rehabbed,
so property values will rise
• Appeal to this specific local government need
58. PRO TIPS ABOUT
GRANTS
• A grant requires a grant proposal
• They are a lot like business plans
• A local address is usually a bonus when applying for a
grant
• Write a clear and succinct cover letter
• Check delivery requirements (mail or in person) and follow
them to the letter