Has anyone been denied business credit from using a virtual office address as physical place of business?

[user9430961]

Hello,

I wanted to start from scratch (on my own) to get business credit, while doing business in the state of Nevada (under a Nevada corporation), as it is too costly to do business in California. Yet I was wondering has anyone had trouble getting business credit when using a virtual office location as their business location address?

 

I just have a feeling with so many virtual offices/UPS Stores/rent by the hour business meeting rooms out there, that a potential lender (especially banks) might see a red flag when their computer identifies a virtual office location (as a customer’s physical business location) and deny credit. I don’t mind using my home address as my physical business location on my business paperwork, but I do not want my home address to end up online whenever people do an online business search of my business . . . as this has happened to me unexpectedly before (in the early 2000's) when I started a business.

 

So this time around, I’m trying to make sure that my home address does not become part of my business in any way, thus is why I want to keep everything under a Nevada corporation (including all addresses reflecting a Nevada location) . . . yet I’m not sure if using a virtual office (that allows use of their physical address as my business address) will be a problem getting business credit in Nevada. So I was wondering if anyone has had trouble using a virtual office address (as their physical business location) while trying to get business credit from vendors . . . and especially trying to get business credit from banks (while using a virtual office location as a physical business address).

 

 

[1PALME]

I had an issue with Supply Works,even thou I have a real office in the building, the building management company also does Virtual Offices. Supply Works googled my address and their website came up(saying they offer private offices, conference rooms and VIRTUAL OFFICE space). Its a big office building but by them seeing they offered Vitrtual Office's it raised a red flag, it took few phone calls to get the issue resolved. Others on here will be more help, so maybe its possible it could could be an issue at some point.

[kaylee34]

I've seen a few people lose their credit lines for using a virtual/UPS store office space. Same for listing something like a storage place as their address. Another thing to keep in mind, you need to check the state and local regulations where you're planning on setting up shop. Some locales will not allow you to use a residential address, storage place or virtual office for any type of business. Some are only restricted to certain types of businesses. They might require an actual business location in order to issue a business license. Just food for thought. 

 

FYI: Everyone I've ever worked for or set up a small business for has had their home addresses tied to the credit lines in some way and it's not just on the business docs. They'll likely want your personal info as well so don't think you can keep it off there just by doing what you're thinking. I'm not going to speak to the tax ramifications and the mess you could be creating for yourself by setting up a virtual company in a more favorable state while you're really operating in another. Tread carefully and consult an attorney and a CPA before you move forward with this. 

 

[user9430961]

On 4/17/2020 at 7:02 AM, 1PALME said:

I had an issue with Supply Works,even thou I have a real office in the building, the building management company also does Virtual Offices. Supply Works googled my address and their website came up(saying they offer private offices, conference rooms and VIRTUAL OFFICE space). Its a big office building but by them seeing they offered Vitrtual Office's it raised a red flag, it took few phone calls to get the issue resolved. Others on here will be more help, so maybe its possible it could could be an issue at some point.

Thank you very much 1PALME, for taking the time to read my post and share what happened to you. I'm glad that everything worked out well for you. I greatly appreciate your help, I have found what you have shared very useful.

 

[user9430961]

17 hours ago, kaylee34 said:

I've seen a few people lose their credit lines for using a virtual/UPS store office space. Same for listing something like a storage place as their address. Another thing to keep in mind, you need to check the state and local regulations where you're planning on setting up shop. Some locales will not allow you to use a residential address, storage place or virtual office for any type of business. Some are only restricted to certain types of businesses. They might require an actual business location in order to issue a business license. Just food for thought. 

 

FYI: Everyone I've ever worked for or set up a small business for has had their home addresses tied to the credit lines in some way and it's not just on the business docs. They'll likely want your personal info as well so don't think you can keep it off there just by doing what you're thinking. I'm not going to speak to the tax ramifications and the mess you could be creating for yourself by setting up a virtual company in a more favorable state while you're really operating in another. Tread carefully and consult an attorney and a CPA before you move forward with this. 

 

Hello kaylee34, thank you for the food for thought. I sincerely appreciate your help. What you have shared gives me a lot to think about going forward. Thank you very much for your help.

[monacho]

When I opened one of my companies 3 years ago we had an executive suites type of office address and opened a checking account and credit card with Chase and another credit card with Amex without any problems.  We disclosed to the banker at Chase that it was a virtual office situation.  

 

Amex called us to ask questions about the business and they didn't like the virtual office so we had to use our home address for billing on that account.

 

Nine months later we moved into a permanent office.  All of our bills and statements were being sent electronically for all accounts so it didn't occur to us to update everyone immediately.  

 

Ten months later Chase closed our account for signing up with the virtual address.  When we got the notice that it would be closed we went straight into the branch to deal with the address issue and were told "we can't keep the account open because the order to close it has already been processed.  Your banker was supposed to call you to warn you before this happened."

 

So we got a new account, Chase paid to replace our checks, and we got a new banker too.

 

I think for lots of businesses a home office is better than a virtual office...

[DarnelH]

I have had positive experience using Regus virtual office services. I chose the one where you can actually go there a few days a month and has answering and mail services.

[jecalderon]

Great question!!  I will like to share my experience with  about the use of small business owners using virtual offices. Recently, I applied for e merchant account.   Business owners need to apply for merchant accounts when interested to take payments by credit card and debit cards from customers.

 

I recently applied with Elavon . They are a subsidiary of US Bank and one of the largest processor after First Data. The application process requires a credit check .  In my case, they pulled  2 soft inquiry from Equifax.  I was approved for the account , but shortly after 2 days from approved, I received a email from LOST PREVENTION department to inquire about my business model. The asked for  pictures of the front of my office. I responded that my office was co-worker space with virtual office.  The account was closed after a decision from "the upper Managment"

 

I had made maybe about 15 calls asking for answers to why.  The answer was that "I did not comply with security policies"

 

Elavon has refused to give me details to the particular detail that triggered this security policy issue.  

 

Not satisfied and very concerned about what is behind this, I requested a full report from Equifax.  I though to take a look at this even though I do have credit issues impacting my credit ratings .  BUT there I found the unexpected....

 

Equifax is adding a line to a credit report .. Is a WARNING SECURITY ALERT.. states that the address recorded by client is a Package forwarding or mail box service location.

 

This is a new thread that may be an adverse item not obvious at first. I think Banks and financial institutions are aware of the proliferation of virtual office and feel they not considered as legitimate business engagements. 

 

I just will not understand why will this be considered a suspicious activity. I have use virtual office for last 5 years and not coming across this problem.  

 

But looks like is something to take into account next time when applying for credit using a virtual office address.

 

 

 

 

[user9430961]

Thank you monacho, DarnelH, and jecalderon. Thank you all for taking the time to read my post and share your experiences over this issue. What you all have shared has been very informative and educational. 🙂

 

Since my original post, I “think” I’m just going to rent a small office and work there part-time. That way it will make things much easier for me, and I’ll be in full compliance by business credit lenders. Best of all, I don’t have to worry about my home address popping up on the internet as being associated with my new business.

 

During the Great Recession, I ended up having to close my business back in 2008. Yet my home address still pops-up online till this very day (2020) for my defunct business and I still get business credit card offers for my defunct business. 🙁

[calichick]

In order to get business funding your first step is getting a D&B #. That's FREE. Don't let them try to up-sell you anything. DENY IT. But in order to get a D&B you'll need to be legit business. Must be incorporated, city license, website, 800 and/or local number, business accounts, and listed. 

 

Use an address that's not a personal home address. Most creditors want the business to be separate from personal. If you don't have a business address, consider a virtual office. You can use www.regus.com or www.alliancevirtualoffices.com

 

 

 

 

[user9430961]

12 hours ago, calichick said:

In order to get business funding your first step is getting a D&B #. That's FREE. Don't let them try to up-sell you anything. DENY IT. But in order to get a D&B you'll need to be legit business. Must be incorporated, city license, website, 800 and/or local number, business accounts, and listed. 

 

Use an address that's not a personal home address. Most creditors want the business to be separate from personal. If you don't have a business address, consider a virtual office. You can use www.regus.com or www.alliancevirtualoffices.com

Thank you calichick. I appreciate the additional help and recommendations.

12 hours ago, calichick said:

 

 

 

 

 

[calichick]

16 minutes ago, user9430961 said:

Thank you calichick. I appreciate the additional help and recommendations.

 

iPostal1 is cheaper. I seen a few folks using that as well. 

Edited May 25, 2020 by calichick
misspelled

[user9430961]

On 5/25/2020 at 12:15 PM, calichick said:

iPostal1 is cheaper. I seen a few folks using that as well. 

Hello calichick,

 

Thank you again for your recommendation and help. 🙂

[mcmxciibiz]

Here's the thing... The bank underwriters are now hip to the virtual address game and so is Google. When you use a virtual address on a credit application their bank logic software scans all of the data points and if your business address doesn't pass the sniff test (the scan shows other businesses with the same "suite number") your application is flagged for a manual review. The obvious workaround is to lease or rent a real office space, but that's cost prohibitive for most startups. Another workaround is, call small-mid sized law firms and accounting firms and ask if you can sub-lease office space from them (a room, a desk, etc.) - I've done this a few times and the address I use now is a deal I made with a one man shop lawyer where I pay him $300 a month to just use his office address and receive mail every blue moon, which he calls me and then forwards. When it comes to business credit and funding... you will NEVER get any big money from a lender (250k, 500k, 1M etc) if you're using a virtual business address. *Read that again. Why you ask? Because it screams FRAUD. I know, I know..."I would never pay $300/month just for an address" I get it, but I just got an $81,000 ULOC in my first round of funding using that same $300/m address. Tip: Before you sign up for any office space or virtual address do your research. That means Google the address so you can see what the underwriters see. BTW: All of these bank UW's talk to each other in the SBFE that's how the know what to look for. Hope that helps. 

[user9430961]

On 6/25/2020 at 2:20 AM, mcmxciibiz said:

Here's the thing... The bank underwriters are now hip to the virtual address game and so is Google. When you use a virtual address on a credit application their bank logic software scans all of the data points and if your business address doesn't pass the sniff test (the scan shows other businesses with the same "suite number") your application is flagged for a manual review. The obvious workaround is to lease or rent a real office space, but that's cost prohibitive for most startups. Another workaround is, call small-mid sized law firms and accounting firms and ask if you can sub-lease office space from them (a room, a desk, etc.) - I've done this a few times and the address I use now is a deal I made with a one man shop lawyer where I pay him $300 a month to just use his office address and receive mail every blue moon, which he calls me and then forwards. When it comes to business credit and funding... you will NEVER get any big money from a lender (250k, 500k, 1M etc) if you're using a virtual business address. *Read that again. Why you ask? Because it screams FRAUD. I know, I know..."I would never pay $300/month just for an address" I get it, but I just got an $81,000 ULOC in my first round of funding using that same $300/m address. Tip: Before you sign up for any office space or virtual address do your research. That means Google the address so you can see what the underwriters see. BTW: All of these bank UW's talk to each other in the SBFE that's how the know what to look for. Hope that helps. 

Thank you very much mcmxciibiz! I greatly appreciate your help and advice. Congratulations on your 81K ULOC! :-)

[DDP]

Thanks you  very much for this information!  It stopped me in my tracks researching virtual addresses since I'm looking to apply for funding soon. I found a RE company that  office address/  mailbox rental BUT its a Real-estate co!  I took your advice and googled the address a picture of the building  with a huge Realty sign comes up. This would probaly hurt more than help since RE is a high risk industy huh? They give you your own unit number so I could say I rent an office from them but I am not sure.

 

Also, you and the lawyers business are registered at the same address with no issues? The bank don't say wait its two businesses at on address...  let's look further into this before we approve?

Any info would help me immenslty.

 

 

- Best Wishes, DP

[DoNCEO]

does iPostal1 work to build business credit can i use this to build my business credit?

[ShawnPY1972]

On 4/15/2020 at 5:21 PM, user9430961 said:

Hello,

I wanted to start from scratch (on my own) to get business credit, while doing business in the state of Nevada (under a Nevada corporation), as it is too costly to do business in California. Yet I was wondering has anyone had trouble getting business credit when using a virtual office location as their business location address?

 

I just have a feeling with so many virtual offices/UPS Stores/rent by the hour business meeting rooms out there, that a potential lender (especially banks) might see a red flag when their computer identifies a virtual office location (as a customer’s physical business location) and deny credit. I don’t mind using my home address as my physical business location on my business paperwork, but I do not want my home address to end up online whenever people do an online business search of my business . . . as this has happened to me unexpectedly before (in the early 2000's) when I started a business.

 

So this time around, I’m trying to make sure that my home address does not become part of my business in any way, thus is why I want to keep everything under a Nevada corporation (including all addresses reflecting a Nevada location) . . . yet I’m not sure if using a virtual office (that allows use of their physical address as my business address) will be a problem getting business credit in Nevada. So I was wondering if anyone has had trouble using a virtual office address (as their physical business location) while trying to get business credit from vendors . . . and especially trying to get business credit from banks (while using a virtual office location as a physical business address).

 

 

 

It's ill advised to use these types of addresses to obtain business credit.  The question the creditor will ask is why would any legitimate business not have a physical business address.  When D&B catches wind of this they will black mark your business and you won't obtain any further business credit at all.

[Bambinawar]

Yo tube problemas para abrir una cuenta de cheques, en PNC y Nav ellos no estan cogiendo virtual Office Goin' Postal. Pude abrir una cuenta de Chase pero ya tenia una cuenta de Chase en lo personal. Leyendo esto voy a tener que cambiar la direcion aunque ellos me aprovaron tengo miedo que me la quiten. Abri otra cuenta con davincivirtual.com/ que es la segunda mejor despues de Regus. Ahora me siento mas confundida.