Small Biz CC Help

Hyphen

Hyphen

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Dec 2, 2008
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Around 6 months ago, I established an LLC. I'm 21 years old with just about 6 months of personal credit history behind me, my credit score is in the 700s and I'm trying to continue in building that.

Right now I have two personal cards, a Capital One card with a terrible $500 limit and a Chase card with a $1500 limit. These aren't balance transfer cards or anything, I just have these basically to build on my score for when I need real credit.

Recently I established my business (under this LLC I referenced before) and the model for this business has proven over the past couple months to be pretty successful and I'm excited to continue to scale up. I desperately need credit, though. This particular business of mine doesn't involve PPC or media buys or anything, but I'll compare it to that since we're in the same boat: the more money I have to spend upfront, the more profit that I can damn near guarantee I will be pulling in, and within 15-30 days I can easily pay off any amount of credit that I use.

In short, I need credit for my business. I'm very confident and careful with my spending. I have a small biz checking account at Bank of America and I recently applied for a card with them because overdraft protection with my credit card would be exactly what I need: basically streaming funds from my bank and automatically applying credit from my credit line if I overdraft, perfect. I was denied for that card because

  1. My business has been established for such a brief amount of time.
  2. I have no records of sufficient revenue yet.

Do I have absolutely any hope of getting approved for a small business card, being a relatively new business? Who do I go to?
 


Probably not... But there are threads on how to speed up the process of raising the limit.

How much $ are you needing?

I would be interested in becoming a partner for the right % ;)
 
Go to a credit union. They are more likely to support an upcoming small business but you may need to bring a business plan in order to get a non-secured credit limit beyond $1000 or so.

Another option is to call Capital One and Chase and ask for a credit limit. If you aren't using the cards at all, they won't give it to you. One way to get around this is to use the cards for all your purchases (up to your limit) and then pay it off completely at the end of the month. You want your monthly bill to be for an amount around 30% of your total available credit. As long as you pay the balance before the end of the next month, you won't pay any interest.

However, don't go above 50% of your available credit or you can take a hit on your credit score. Your score will dip some immediately following the increase to your credit limit but the dip will be temporary.
 
jmizzle said:
Another option is to call Capital One and Chase and ask for a credit limit. If you aren't using the cards at all, they won't give it to you. One way to get around this is to use the cards for all your purchases (up to your limit) and then pay it off completely at the end of the month. You want your monthly bill to be for an amount around 30% of your total available credit. As long as you pay the balance before the end of the next month, you won't pay any interest.
Click to expand...
How exactly does this work? Is this some credit plan that isn't openly available to most people, or are there ways to manage a line of credit like this online just as there are ways to pay off/manage credit cards?

Is there still some application process to go through? At this point, with my business being so young, I'm not sure if I want to submit any more applications in case these denials are going to slam my credit score, if I absolutely have to wait for things to mature a little, then that's what I have to do.


Another thing: I actually noticed PayPal (like eBay, Google AdWords, etc.) has their own "line of credit" that they call PayPal Smart Connect. I applied for this with my business account and was approved for $2000 so I was pretty excited, but the application and approval process was weird. They don't take into consideration your business entity's information, they take into account your personal credit score to evaluate if you will or will not be approved. Nonetheless, I now have a line of credit with PayPal that will surely help me a little bit.

Do you know of any other online sources that offer their own line of credit that could basically be used as a means to transfer your cash balance? I mean, with PayPal I can basically take a few hundred bucks every now and then and just basically withdraw it directly to my bank. Is there some other payment processor or anything else online with a similar offering of a line of credit?

I already have 3 personal credit cards, my credit score is in the mid 700s and I wouldn't at all being against getting another card if balance transfers were accepted (would prefer a card that was basically strict to balance transfers only, if that even exists) and I could get approved for a nice fat credit limit.


Thanks for the help so far.
 
When your company is young, just about any credit that you are given will have to come with a personal guarantee. Basically, they will provide the credit limit to the business but if the business goes under, they can come after you for the balance. I'd assume this is why PP made yo use your personal info.

The process I posted above is just part of the process of developing some credit history and worthiness. Have credit cards that never get used is of no benefit to people looking to provide you credit. You need to build a history of using the cards and responsibly paying for the debt.
 
I got a business CC from a Canadian bank recently (inc. is in Canada also).

Here is what I discovered:
- Process is very time consuming and painful
- They do check your personal credit history a lot
- Good alternative is prepaid business CC, deposit some money yourself and
then spend it. You can quickly establish credit history this way. Banks
are easier on you because you're risking your own money.

Then apply for a non pre-paid CC.

GL
 
When you start a new business you basically have a few choices how to make it happen. The first one is to get money off some institutions, the way you actually went. The second is to find an investor by writing good business plan. The last one I could think off would be finding the subcontractor and giving them the % of your business, this is how Playboy had been established. I would recommend not to stick to the way 'where to find money' but to work on business plan and to find the partners. Believe me its not that hard ;)
 
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