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

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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).

 

 

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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.

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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. 

 

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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. :)

 

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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. :)

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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...

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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.

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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.

 

 

 

 

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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. 🙁

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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

 

 

 

 

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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:

 

 

 

 

 

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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 by calichick
misspelled

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