How To: Use Business Credit For Your Real Estate Business

Taking the time to establish business credit can lead to using it to access money. Investing that money wisely can make it possible to use the funds to gain a profit in your real estate investment business.

Here are 3 ways you can leverage business credit to purchase real estate:

1. SBA Loans

You can’t use a loan from the SBA to purchase rental property. However, some SBA loans can be used to finance commercial real estate purchases. Why? The interest rates! They are hard to beat, and are currently in the range of 4%-9%. Although this can sometimes be a challenge, as if you are in a rush to access funding SBA loans may not be your #1 choice. They can take anywhere from 60-90 days. 

2. Business Lines of Credit

Another way to leverage your business credit to use for your real estate business is by taking out a business line of credit. BLOC’s are available online, and at traditional banks. 

A business line of credit is similar to business credit cards in many ways. Like a credit card, you can use it up to the “limit”, pay your balance, and repeat until the account is open and in good standing. Business lines of credit are used when you need to make purchases that you can’t take care of with the swipe of a card. 

Business lines of credit can be difficult to get but with the help of a company like Sprout Financial, you will be in better standing to have a better chance at securing one. 

3. Credit Cards

Some real estate investors decide to purchase an entire property using a credit card. However, there can be a lot of risk involved when you use a credit card, whether business or personal to purchase investment properties. A good use for credit cards is short term financing needs. 

Managing a business credit card well can help you build your business credit profile, which is essential in order to qualify for low rates and good terms on loans down the road.