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Best personal line of credit?


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CB experts,

 

You folks study this way more than I do. Can you recommend which credit union or other source provides the best personal line of credit?

 

We have a business where we import equipment from Asia, then resell it to a niche industry here in the USA. My containers from Asia cost about $60,000 to $80,000 each time we import. We import about two containers per year. The process is that we import, sell about 50% of the equipment, then start the next manufacturing/import cycle while selling the remaining 50%. The markup on the equipment is about 80% to 100% on most of our items.

 

For example, on my most recent container, we spent $88,000 with all shipping and duties. Once we sell it all, it will produce about $156,000 in sales for a profit of about $68,000 on that container of equipment. My brother and I do this together as a side business from our regular jobs.

 

Up until now we have been doing this completely with cash on hand and no credit. But it would be much easier if I had about $50,000 in credit to work with.

 

For example, I have deposits on some equipment, but it won't fully sell with a final payment for 90 days. So basically several major pieces of equipment are already reserved by a customer, so I want to start the next container in motion from Asia because it takes 90 days. But I don't yet have the full payment from the customer of the current container.

 

My spouse has scores is the 780+ FICO range on all 3 credit bureaus.

My own scores are 730+ FICO.

 

We each have just obtained personal LOC (me $10k, her $15k) with our local credit union that adds up to $25,000 at 10.9%. Their maximum PLOC is $15,000.

 

Are credit unions typically the best deal for personal lines of credit? Should I just find another credit union to do?

 

Am I missing out on any incredible tricks that CB experts know of to do something more effective with credit that will meet the needs of what I am trying to do?

 

Thanks

Edited by RocketGoBoom
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Yeah, you will have to PG if your time in biz, employee count, and, income is below UW criteria... or if you go to a CU.

 

.... but the benefit here is that most all major banks won't report to your personal credit reports which keeps you nimble and within 12 to 18 months you might be able to secure a new LOC w/o PG.

 

You should consider building biz credit if this is a long term venture. This will allow you to eventually shift a lot of risk from PG to non-PG Corporate backed credit.

 

Therefore further insulating your downside.

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there is no good or bad CU. they all pursuit the same thing: to make money.

 

check you state credit unions list, then go to talk with a personal banker.

 

if you ask me... there is something fishy in your business. you double your money with every shipment, and now you cant pay for another shipment( when you should have money for at least 4 containers). you should focus more on your cash flow.

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ok, I understand. Can anyone suggest a bank or credit union that is known to provide good deals on such lines of credit?

I would definitely go the BLOC route, if I were you, especially since you'll be PGing them. They won't show up on your personal reports so you can keep applying for new BLOCs down the road without the banks saying "Nah, you have enough available credit".

 

I have a mix of personal and business lines of credit. On the business side I have Wells Fargo BusinessLine for $40k at 12% and a local bank BLOC for $40k at 4.5% (still don't know how I got such a low rate!). I'd say your best bet would be small, local banks for more favorable rates, however I'm basing this solely on my own narrow circumstances.

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if you ask me... there is something fishy in your business. you double your money with every shipment, and now you cant pay for another shipment( when you should have money for at least 4 containers). you should focus more on your cash flow.

 

We spend the profits on life also. I have the business pay me about an extra $3,000 to $4,000 per month. I also pay a portion of our profits to my brother for his work.

 

There is nothing at all fishy about this and I am surprised you think so. I think that says more about your inexperience with how importing and resale works.

 

The markup on just about everything wholesale to retail is typically 100%. Our markup is about 80% to 100% depending on the type of equipment.

If there markup were smaller, this probably wouldn't be worth doing, because I also have to pay for the mistakes, replacing parts that go bad, etc.

 

Our shipping cost for the container from Asia to our warehouse in Idaho is $5,150 door to door plus about $1,500 in custom duties per container.

Luckily we get to use the warehouse for free because it is part of my brother's other business.

Edited by RocketGoBoom
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