Have you ever walked into a bank branch to borrow money in the name of your LLC only to be told that they don’t do that type of lending. Unfortunately, that is a regular scenario that pays out all across our country. Luckily, that is not necessarily true. There are secrets that most branch bankers don’t know. We’re going to share those with you right now.
Big banks typically put poorly trained order takers into branch positions…including the managers. They are trained to do the simplest of tasks and the extent of the lending that they get to do are basic home equity lines and other low-level loans. They typically aren’t able to lend to LLCs. Business and Commercial Bankers typically are not in the branch network, but they routinely lend to LLCs. You simply need to chat with them. Here’s the catch, unless you are a developer, builder, or a big-time commercial investor, banks hate residential real estate investors. Many banks have it in their guidelines that lending to a “real estate speculator” is not something that they prefer to do. I actually recently wrote an article on that very subject. The answer to this dilemma, however, is that business or commercial bankers can lend to LLCs with the LLC owner signing on personally as a guarantor. You’re just speaking with a branch banker that doesn’t have a formal credit background. Even if you are borrowing on your own name and you enter the loan purpose as “to buy investment property,” you might find that the bank is very cold to your request. The key is to deal with someone up the chain a bit that actually has decision-making authority. Most bank branches do not have those sorts of people.