Fundability is an important part of investing, and how we deal with credit can impact that. Scott Carson talks with Merrill Chandler from GetFundable.com about the different credit myths that are destroying your ability to get business and personal lines of credit. There are over 300 credit myths and Merrill helps you cut through their knots to help make yourself fundable. If you are currently struggling to find why you keep getting turned down at banks, then this is one Note Night you won’t want to miss!
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Clearing Up Credit Myths That Impact Your Fundability With Merrill Chandler
We’ve got a lot of great subjects. We are taking a little pop culture there and sharing it here with our special guest, who’s going to be rocking your world like a Sparta. We have a very special topic for many of you especially starting off the new year. Many of you have amazing goals and things you want to focus on here in 2022, but many of you are probably screwing stuff up that you don’t know about. Before we get into the main meat and potatoes, before we do that one, I welcome all of you here to the show.
I’m honored to have all of you guys join us here. If it’s your first time on the show, welcome. We’ve been doing these since 2011. We’ve been doing a Monday night webinar or conference call with our students and entrepreneurs all across the country. We have a very international audience overseas as well too. You can always subscribe to the show. We’re about to release its 100th podcast episode. We do take these episodes. You can also watch it live on YouTube on the WeCloseNotes.tv channel.
Make sure to go there and subscribe to it. That way, you’ll be notified of all the great videos that we put up there, whether it’s a webinar or podcast episode or a free training that we throw up there. We encourage you to check it out. There’s no cost to subscribe to the channel or be here on the show as well.
You can listen to the show on any podcasting platform like iTunes, Spotify, Stitcher, Google Podcasts or whatever it might be there. It’s available across all platforms, including iHeartRadio as well. I also encouraged you to check out the other two podcasts. We have The Note Closer Show Podcast, our 15,000-megawatt blowtorch podcast coming up on 1.2 million downloads. We also have NoteCAMP.live, which we’re pretty stoked about as well too.
We exceeded the 150,000-download mark of the past couple of seasons. We’ve got new episodes being released from 2021’s Note CAMP, almost daily and weekly, going up until June 2022. Check it out anywhere that you listen to podcasts. Make sure you subscribe and leave a review. This episode is dedicated to our note investors out there. This is one subject matter that I think should be required in high school and college. There are so many bad myths out there.
Merrill is not only an amazing individual, first and foremost. He’s got a big heart, but he is, as we like to call, the Credit Messiah. He is a big fan of The Matrix. We should call him Neo. He is the one out there sharing the message and helping people avoid falsehoods when it comes to making things happen. I’m honored to have him. He’s been on a big push in 2021, finding all these different myths that are going on. I won’t take any of his thunder. Merrill, what is going on?
It is so good to see you and your tribe. Your tribe has always been top-notch. I’m thrilled to be here. This mythology rollout, these myths, misrepresentations and everything, we have great things to talk about. We’re going to blow some minds.
There were more than 300 myths, but we went 300 because it made sense marketing-wise.
That was awesome. By the way, I have a free gift. I’m building an eBook. I got to make it look decent but for everybody who sends us an email, we will give them a link to get a free copy of the 300 Myths. Even though we’re talking about a bunch, I’ll give it to anybody who asks for it. We’ll pick it up and knock it out.
You can also reach out to Merrill. It’s Merrill@GetFundable.com.
Let’s go to Bootcamp@GetFundable.com, so that way it ends up in Sky’s universe and Sky is the master of all things Get Fundable.
He’s a master of the Get Fundable marketing domain. I know you got a presentation you’re probably pulling up. You want to take questions at the very end probably, don’t you?
You tell me when. I’m bringing some bootcamp stuff to the table tonight because there are too many myths that aren’t getting enough attention. We got to stop the madness.
Merrill’s team did a very in-depth focus on these different myths out there. You’d be surprised. I was surprised when Merrill and I were talking about this. I’m absolutely blown away there for you. Take it away, my friend.
I’d like to welcome all of our readers. Thank you, Scott. You and I have been doing this for years. There are so many problems in underwriting and our understanding of personal and business credits. Everything is so skiwampus out there that in 2022, we are on a campaign to debunk over 300 credit repair, business funding and real estate myths. This is the launch party. Thank you, Scott, for the 300. I loved the movie, but that was so freaking funny.
First of all, I’ve been doing this for many years. I started Lexington Law on May 1st of 1992. It’s still my jam. If you’ll learn anything, we have power over our funding capability. We have to know what we’re doing. We’re going to be talking about insider secrets that I got in the hallowed halls of FICO and lender underwriting teams, about how to be fundable, what checkboxes we need to check in order for them to love lending to us.
That’s what we’re about. I’m committed to three objectives. We want more funds so that we can thrive. Those funds give us the opportunity to do more deals, buy more notes and do better and faster turns in real estate. Imagine being able to keep the money in your own pocket rather than having to partner up or hard money lenders, etc. My goal here then is to make sure that you can see for yourself. You don’t have to believe Scott or me.
You can see for yourself that there is a clear path to be able to get the least expensive business loans and lines of credit, regardless of where you are right now. A perfect example is I interviewed one of our clients. He spent nine months literally doing relationship building. One of the things you’re going to learn about is relationship-building activities with the bank. He got, in two banks, $50,000 business line of credit at each.
He was doing a testimonial for me. He’s like, “Merrill, I know what you told me to do. I did exactly what you told me to do. I still don’t know how it worked. This is crazy. It’s awesome.” Now, we’re going for two more banks. It was prime plus 0.75%. His lines of credit were 4% on this $100,000. We’re facing a bunch of funding challenges. We have a lack of capital or the alternative lending is super expensive.
You already know that note buyers and real estate investors sometimes we’re already too risky for traditional lenders. We’re going to talk about how we work through each one of those concerns. How do we do it? We got to navigate the four funding minefields that exist that are replete with funding landmines. “Merrill, that’s a violent metaphor.” How many of you have walked into a bank, fill out an application online, wherever you did it and you got denied and have no idea why?
Imagine being able to avoid the funding landmines because you know exactly what a lender’s looking at before you even fill out the application. Let’s go through quickly the four funding minefields. One, this game keeps changing. It changes all the time. Going into COVID, derping along in the middle of COVID, kind of out of COVID and back into COVID. The credit game keeps changing. You think you’re playing checkers and the lenders are playing chess. What’s going on now in business credit is like mortgages were in 2008.
Everything is changing behind our backs and nobody has bothered to tell us, not one thing. It is essential that you have someone in your corner that keeps you updated with all of these changes and what new plays to make because it’s no longer checkers. Borrower education and your knowledge of what you’re doing are vital. I have hundreds of testimonials of people who are saying that what you’re learning now should have been taught in high school, college or something. This is fundability. It’s the difference between playing checkers, playing chess and winning at chess.
The next one. Supposed experts are promoting myths and misrepresentations. We’re going to start this process to shine the light on all the lies that you’ve been fed for years. Here’s a perfect example. I bought every one of these credit books from Amazon, every single one of them and to date, we have over 400 myths and misrepresentations. I’m not counting ones that happened 2 or 3 times.
One, I have 400 separate and distinct misrepresentations. This is a gross violation of public trust. You have been deceived by people who don’t know what FICO and lenders are doing. I’m not taking it anymore. I’m not going to make my clients fundable. No, I’m on the warpath. If you guys follow my Instagram, TikTok, I’m literally taking down people who say they know what they’re talking about and I’m going to call them out. It is not okay because we have been lied to.
The next one is, this minefield, we have to harness and leverage the unstoppable forces we’re facing. What do I mean by that? If you’ve seen the presentation before, there are two unstoppable forces that are going to happen. Think of them as waves that we either surf or will be drowned by them. They’re happening whether or not we do anything about it.
The first is that lenders make the most money when they lend. This was the conclusion of a news cycle that came out, “Wells Fargo, Bank of America, Citi Group, and JPMorgan Chase continue to post multi-billion-dollar profits annually.” If they have all this money to lend, why aren’t you getting approved for unsecured bank loans and lines of credit? What’s going on? As I’ve said previously, you’ve been lied to about how to get approved. Because of these lies, there is an inadequate pool of qualified borrowers. That is changing for me in 2022 and our campaign. This is changing for you now.
Borrower education, because you don’t know where these landmines are, many times that you go into a bank, you are looking for funds and they deny you. That is over as a result of what you’re going to be learning now and moving forward. There are not enough qualified borrowers because lenders only make money when they lend. Borrowers who are capable of meeting tighter lending guidelines are getting more and higher approvals.
Let’s say this is the funding target. Loan approvals are smaller because they’re in the outer rings. Anything out of the outer rings, you get a $5,000 approval instead of $50,000. If you optimize your credit to meet lender guidelines, you are able to take down approvals in any economy. If we don’t meet the approvals, right now, they’ve shrunk the target. Those very same dollars that we were getting approved even though they were low amounts, we’re not getting them now.
If you optimize to meet those guidelines, the target is smaller, but you have optimized your profile to hit those guidelines. Big target, low approval amounts. Inside target, high approval amounts. When it goes from here to there, we still get approved. That’s what we call fundability. Fundability is the ability to be approved at any time in any circumstances because we’ve built a relationship with a lender who says yes to us.
That happens in two ways. One, we become the perfect borrower, that ideal bank customer and our credit profile or borrower profile are smoking. When they give us a credit card, a credit line, whatever loan product we get, we treat it well so that in their underwriting guidelines, we’re the best customer they have and give us more approvals.
The first thing is you’ve got to learn the insider secrets to get fundable. That means unstoppable force, number two. This is happening whether we do it or not. The next force is technology. We talked about getting approved in 30 seconds. No human being looked at that application. It means technology was evaluating the data points that were inside of your application. They pinged all the databases and came back saying, “We’re going to approve you.”
How much you got approved for was based on your score. Remember, that’s how we started out. How many of you have received an email or a letter from your bank or a credit card issuer saying, “Congratulations. We’re raising your credit limit. No inquiry, income verification or financials,” nothing. That’s free money because you hit the fundable guidelines.
This is what we’re talking about. The unstoppable force is that everything is going. I guarantee you over the course of the next few years, we’re going to be moving towards mortgages that are automatically underwritten. I talked to FICO. It’s coming. Everybody’s planning on it. They’ve even developed an entirely new software version called FICO 10T to track and move us towards even mortgage automatic underwriting.
This technology is the wave of the future. How did I get to know what these funding criteria are? I was introduced to FICO and invited back to what’s called FICO World. Think of it as Mount Olympus. For you, Greek mythology types aficionados, it’s the Mount Olympus of the credit and funding gods. Everybody comes here and talks about underwriting criteria, etc. I was the only borrower representative with several thousand people in attendance, lender teams from all over the world.
I was introduced to this gentleman, who is the CEO, Will Lansing. I spent some time with him and he asked me about my borrower education program. I said, “I help people get fundable.” He’s like, “Let me have you talk to my score development team.” I met with the personal and the business score development teams so that they could teach me what it means to be fundable so that their lenders would accept our applications and approve us. FICO’s clients are lenders.
As a result of that, to this day, I’ve been to three FICO World. In May 2022, I’m going to my fourth. I have a FICO liaison that I speak with on the regular, usually around two times a month. It’s all about having a seat at the table. You are here because you get the latest and best intel in the note marketplace. It’s real estate investing extraordinaire.
Here’s the question for you. If I have a seat at the table, my tribe, anybody who loves fundability, you get to have a seat at that table as well. How many of you get the power and potential of having a seat at the FICO and lender underwriting table? By staying updated with these, we know what lenders are doing on the regular. I’ve been doing this for a very long time. For many years, I discovered that most real estate and business entrepreneurs believe you have to have full documentation.
That is no longer true if you know how to qualify for automatic approvals. Many of us believe that we don’t have any control over our funding approvals, but let’s do the math. We’re going off book a little bit and Scott has never seen this before except at the bootcamp. First of all, lenders gave all of their approval authority to software. They wrote algorithms and developed everything to lenders-empowered software. We call it underwriting software with their approval authority.
That’s why those of you filled it out and it literally came back approved. No human being looked at it. The lender didn’t look at it. The software did. The software then has rules. It’s looking at certain borrower behaviors. They’re putting up checkboxes. The software says, “Does he have that?” If you know what the software is looking for, you don’t have to talk to a human being.
If you know what the approval criteria are, who is in charge of your funding approvals? The software is not in charge of the approval authority. If you know how to check these boxes, you’re in charge. It’s rubber-stamping you. Most of us believed that we have no control over our funding approvals and that we were subject to the lender’s whim. There is no whim. It’s check, check, check. We know what it takes to be fundable.
You’ve also been lied to about what business credit is and what it means. I’m not talking about business credit where you get a Grainger credit card and a Uline account. I’m talking about the tens of thousands, $50,000 to $100,000 in business credit lines and loans that do not report to your personal profile. It’s not rocket science, but I want us to do the math together so that we revisit what we’re talking about.
As a result of everything that I’ve been doing, I discovered the key to unlocking this business funding. It doesn’t matter what it is. I discovered it the hard way. I’ve been doing this for zillion years and paid the price so that you don’t have to. You get to do it the easy way. Because you are even here at this training, you get to cheat and do it the easy way.
We’re going to follow the path to these approvals. As a result of everything that I, that I learned, I built an entire step-by-step funding formula that I would love to share with you that triggers automatic underwriting and limit increases without collateral, tax returns or financials. You guys have already had experience in getting automatic approvals and limit increases without collateral or tax returns or financials.
It works for any borrower. Some of you may have seen this before. It bears repeating. It’s magical. Our regular approvals are $20,000 that grow to $150,000. Some even get $100,000 out of the gate as I shared with you. This is Teresa. Pay close attention because this was an amazing win for a woman who worked with us for several months.
“I did what you said to do.” It’s a couple of things and my score went up 30 points right away. Within six months, my score went up over 100 and I was already in the 700. My score is perfect now. They all lined up and I was able to achieve a $500,000 unsecured line of credit my first time out of the gate with my first bank. That put me in a position to change the game that I’m executing to change my retirement strategy. In fact, I used the line of credit for the first time.
It put me into a $1 million asset that I would not have been able to secure. I was putting all the documentation together and the bank called me and said, “We’re done.” I said, “Don’t you want the paperwork?” They said, “No, your credit score is fine. It’s unusually fine, so we’re going to give it to you. We don’t need any more paper and it’ll be an unsecured line of credit.”
She’s a note buyer. Her whole business is notes. That asset that she’s talking about is a $1 million asset. We’ve also had $580,000 approvals plus 90 in other miscellaneous lines of credit from Tier 1 banks. This is not atypical. We have to build your profile. I want you to know there is a clear path for you. From wherever you are, there’s a clear path through these minefields in order to get fundable.
I got three myths for you and their breakthrough insider secrets. First and foremost, this is going to blow your mind. The myth is that your checking overdraft account is a good thing. How many of you have an overdraft account? Number one, and how many of you use it? This may break your heart, but here’s the insider secret. Your overdraft account is quietly killing you. Your checking account, both personal and business, is the key to your business credit approval success.
First of all, let’s build a checking account. We have an overdraft account. Most overdraft accounts are usually $500 to $1,000. How many of you got a free overdraft protection account when you opened your checking account? Here’s where the myth comes in. We think, “That’s awesome. Thank you very much. That’s so sweet of you.” It’s not true. This is where lenders are looking for your borrower behaviors.
It doesn’t matter if your personal credit card is backstopping it, a savings account or their card. It does not matter. What they’re looking for is to see how you treat your money. Let’s say you have $1,000 in here. Your check, latest flip, sell your notes, whatever you’re doing, any time you punch through zero, the lender over here is like, “WTF.”
Any time you punch through zero, you are not being a good steward of your money and the AUS, Automatic Underwriting Software says, “They are managing their money poorly.” They are unlikely to approve you for a credit line, credit card or loan because of how you are treating your money. This is the kiss of death. Most of us think, “I saved $35,” because they had a credit line to pay it. That is not the benefit here. You do not want to ever use this.
Here’s the worst of the worst. Not only do you pollute the lender relationship, but this balance gets reported to the credit bureaus. Every credit bureau has these coded. They are only $500 to $1,000. Any sophistication only has a $500 credit card unless you’re building and it’s secured or something like that. Most of us have more than this.
The underwriting software looks at your profile, sees a balance here and says, “No bueno. I don’t like this borrower.” That right there, maybe even one of the landmines that you step on that we didn’t even know. The myth is that, “Thank you for the overdraft account. This is awesome.” We want to make sure that we don’t do this.
Myth number two, all credit cards build good credit. It’s not true. First of all, the insider secret is that some credit cards are ruining your financial reputation. Your credit cards may be causing your funding approvals to crash and burn, and you don’t even know it. These are the landmines that we are trying to protect ourselves from.
I’m fast-forwarding to Tier 4. This is the bastard stepchild tier. Notice in that 100% column, Elan, Merrick, Credit One, Synchrony, First Premier Bank, every one of them is a subprime lender. I call them predatory lenders because anybody who does a bankruptcy gets the late pay. Any kind of delinquency on their credit report collections, they buy those lists from the credit bureaus and market to you because they want to give you a credit card.
Toyota Motor Credit Corporation is the financing for an automobile. These are revolving accounts, credit cards and credit lines. Let’s say Honda Financial. You want to get an ATV. How many have you have gotten an ATV credit line so when you pay it off, you have the opportunity to buy a new one? That’s a finance company, Honda Financial Services. Anything that has the word financial in it is Tier 4. These are no bueno.
Tier 4 cards equal junk cards, which equal consumer finance accounts. I’m telling you that if there is a slash between two different sets of initials or names, it is 95% sure that it is a consumer finance account. In this case, it stands for GE Money Bank underwriting or financing JCPenney’s paper. Consumer finance accounts, I learned this when I met with FICO. FICO downgrades your fundability. It will increase your interest rates and lower your approvals if you have consumer finance accounts.
It’s called the negative indicator. It’s not delinquency or derogatory, but it’s literally saying, “Watch out for these people.” Tier 4 accounts equal junk cards and drag down your fundability. It is evident that you are a consumer. If you are a consumer, we are out of the realm of being a professional and strategic borrower. Business lenders want people who know how to use their money to make money.
Personal credit isn’t that way. Personal credit is, “Get a retail account. I’m going to buy some Home Depot shovels. I’m going to have a credit card where I have rewards and points.” That’s all-consuming. Business is looking for strategic borrowers who know how to make money with their money. Business lenders don’t want to lend to a consumer because you will consume the money.
That’s what we do as consumers. They want you to leverage money and make money. That’s what they’re in the business for. Finally, credit card myth number three. You can’t lose with free flights and nights rewards. We all love our free flights and nights. We love points and rebates. The problem is those credit card rewards could cost you $100,000 or more. Travel and reward hopping can ruin your future fundability.
I’ll tell you a story about Sherry. She’s a delightful woman and was a real estate investor. She watched a presentation at a live bootcamp. She came up to me and was, “Merrill, I love what you’re doing. I want to your client. I love travel hacking, flying for free around the country and the world. It’s awesome and amazing.” We don’t want to ask that yet because we don’t know all the things that are happening behind our back. I asked her, “Tell me the most you’ve ever saved in one-year travel hacking.”
She’s like, “It was $13,500.” That is hell a lot of savings of not paying for flights. She and her family went to Cabo at an all-inclusive resort for ten days. Flights, food, everything was paid for by her points and her miles. I said, “This is awesome. Congratulations.” If you had a $100,000 credit line where you could write a check and do a deal, flip property, buy notes, sell notes or whatever it is you do. When she saw this, she got these mad dopamine hits by being able to save all this money but the opportunity cost was out of control.
Even if you made $27,000, do you want rewards points? We’re lowballing this. It can come at a significant price because what happens is to do this, you have to open up new accounts regularly. She was opening 2 or 3 accounts per year and harvesting all the points. She would keep them open a year. She had opened it, keeping it open a year and closing it. This kills what’s called your average age.
In the middle of this, to get these points, you also have to spend $3,000, $5,000 or $7,000 in 90 days. All of the borrower behaviors to get these points are exactly opposite to the borrower behaviors to get the $100,000 credit line. We have to stop the madness. We have to stop sacrificing this in order to get this. They set up those rewards in those accounts and gamify them so that we get dopamine hits. How much dopamine are you going to get by doing these?
I interviewed a client with two $50,000 approvals from the first two banks. He was like, “This is crazy.” He was so excited because of his first $100,000. Now, we’re working with two more banks with him. We are holding a two-day bootcamp, sixteen hours on the 28th and 29th, 9:00 AM to 5:00 PM Mountain Time. That’s 11:00 AM to 7:00 PM on the East Coast, 8:00 AM to 4:00 PM on the West Coast, where we look at dozens of the challenges. It’s a minefield review. We go through the minefields. We go through what the problems are that are keeping you from getting funded. There are over 30 strategies targeted to make you fundable. It works for new real estate, note investors and experienced real estate.
It doesn’t matter where you are. If you think you have bad credit, good or even great credit. You might think you have a fundable business, you may not. The idea is we need to stop having you lose credit limits and have your accounts closed. We need to have deals stop slipping through your fingers. Stop the stress. How would you guys like to be able to walk into a bank and already know you’re approved because you hit those checkboxes that we talked about?
Stop paying high-interest rates for private or hard money. We don’t want to be your own credit partner and own financial institution. There are some amazing strategies that we go through in this bootcamp. You’re going to learn how to establish and protect your borrower identity and help build trust. We talked about building a relationship with lenders. What the borrower behaviors are?
We’re going to talk about all of the borrower behaviors, every one of them and how to use those to trigger automatic approvals. How to set up your accounts and change your accounts so that it builds lender confidence? It’s the little-known debt shifting strategy. I love rewards and points but guess where I use them? I get business credit instruments that give rewards and points, not on my personal profile.
On the second day, we’re going to be talking about how to avoid the mistakes that kill your funding approvals. What does real business credit offer? You’re not going to believe that there’s so much misinformation out there. That’s why I’m doing this entire campaign on these myths. You don’t even know these business codes are denying you credit and are being done behind your back.
As I shared with you with the guy who got approved, how to turn your first $100,000 into $1 million through leveraging these bank relationships. We talk about your revolving account, settlement loan portfolio or your 24-month look-back period, utilization, history, inquiries, derogatories and identity. These are all the things that we talk about in this bootcamp. We even have worksheets where you will be able to compare yourself against this. How many of you would like to see this list and see how you’re doing literally? When you sign up for the bootcamp, we give you a fundability index.
It compares you against lender criteria and grades it out according to what FICO and lenders have given me to show you where you are. It’s a starting point to build from there. That’s what we do during the bootcamp. We weaponize your business fundability. Even at the end of the bootcamp, with the documentation you have, I can forecast your funding timetable, $100,000, $1 million or whatever it is that you like.
If you were to go to my website and buy each one of these modules separately, it’s worth $3,994. The silver bootcamp pass is $97. This is the borrower education price. I want you to know what you are missing. I’m telling you, go read the reviews. You are going to see your peers whose minds have been blown and how operationally competent they become as a result of this education. I’m going to sweeten the deal. I’m going to make it risk-free. Here’s what I mean.
If you go through the first day and you are not raving about how awesome it is, I will give you 100% of your ticket price back, money back. You don’t get to go to the second day, but if you are not thrilled with the results of what you learn, the actual strategies we go through, it’s not your jam or it didn’t make sense, or you are not overwhelmed by thrill, I’ll give you your money back. Is that a deal? All you have is, is it worth gambling one day to see how close you are right now to get unsecured business loans and lines of credit so you can do more deals.
You’ve got gobs and gobs. I took these from the testimonials that are on GetFundableBootcamp.com. Read the reviews. I’m here to help with any questions. What are your experiences? What situations can I help with? Let me tell you what they are. Silver is a one-time viewing. This is not a recording. This is live streaming where after every one of the 30-plus strategies, we stop and do Q&A on every single strategy live with me.
Silver is a one-time viewing. Gold are recordings and the $29 a month gives you access to future bootcamps. I meet twice a week with my tribe on Tuesdays and Thursdays at 4:00 PM Mountain. That $29 keeps you right here in the fold and asking any questions you want. Post bootcamp, I’ll answer your fundability questions so you can continue going down the fundability path.
The $1,997 is a two-hour strategy session with me. This is not coaching. It’s a blueprint of your fundability. We take all of your documentation and set up an operational blueprint. You can upgrade from silver to gold before the bootcamp, but you’re not going to get this price again. The coaching session has to be done before the bootcamp because I have to set up my schedule. A lot of people take advantage of it and I want to make sure that I schedule it ahead of time. You cannot upgrade at the bootcamp.
I want to bring this up. The SIC codes, the company codes. We use that with our bank on opening up. They were trying to steer us towards specific SIC codes, but we’re like, “No, it’s this specifically because we’re not doing that. Do not try to steer us towards that.” We do have a question and Steph brought this up because she’s such a big pet advocate. When you have a sick animal or go to the dentist because you got a bad tooth. If you don’t have a full amount, they’ll try to qualify you with you a Synchrony or something like that.
It’s a garbage junk credit line.
If you’ve been approved for that, should you cancel it or leave it open if you’ve never used it?
If you’ve never used it and it’s less than six months old, definitely. If it’s more than six months old and you’ve used it, that’s a minefield. We need to walk through that together. I would tell somebody who knows what they’re saying, “Come to the bootcamp and suss out your particular situation.” For you guys, talk to your advisors.
What if you don’t have two years of residency or two years of being in business?
It’s all about building business relationships. If you don’t have two years, you can still get high-value business credit cards that don’t report to your personal. Here’s a perfect example. Capital One Spark business cards all report to your personal. Every time you’re being a good businessman or businesswoman, you use the card, it raises your utilization and lowers your fundability and points. That is a horrible business card because it’s not even a business card.
It’s a wolf in sheep’s clothing, masquerading around as business credit, but it harms your personal profile. You can get business credit while you’re building the relationship so that when you hit that two-year mark, you can go for credit lines or business loans. We have an entire process. You’re going to learn at the bootcamp how to build the relationship so that you’re ready when your business age is appropriate.
Is it possible to get business credit that is not a credit card?
At two years, absolutely. There’s not a lender out there that if you walked into the bank and say, “I’m brand new, can I get $100,000 business line of credit?” The answer is no because they want to know how you treat your money and their money via credit card. They’ll give you the credit lines or the loans. Business credit is not going to happen in the next 90 days. Do not come to the bootcamp if do not have the long game.
When I say long game, I’m 6, 12, 18 months. I don’t know if you’ve got crap for credit. What I’m teaching you at the bootcamp is how to be fundable for the rest of your life. If you’ve got the medium to a long-term game in play, you will die and think you went to heaven. If you say, “Yeah, I’m not interested unless he can give me $100,000 in the next 90 days that don’t exist in business lending.” It doesn’t.
At some point, you’ve got to do some things to show some profit.
If you have low to no profit, here’s what’s amazing. Another thing that you guys are going to learn heavy details in the bootcamp that lenders look at on the business side, lenders look at your top line, not your bottom line. If you’ve got a decent top line and I can also show you how to use money in your account, not revenue, you can’t count this as income, but you can build relationships with deposits if you do it the right way. If you hit these checkboxes, you can do it the right way. You don’t have to be a high-revenue company yet to get business credit cards, lines and business loans.
Should we buy all consumer goods in cash only?
You want to buy those with Tier 1, 2 credit cards. Use other credit cards to buy that. I love Home Depot or Lowe’s commercial account not on your personal profile. It’s junk on your personal profile. It’s amazing as a business account. I have a client with $250,000 on his Home Depot credit line and he uses 90% of it every quarter, but you got to know these rules and this game.
Here’s a little thing you may not know about banking. A debit card is not going to build any type of credit for you. If you use your debit card versus your credit card and have identity theft, they steal the money off your debit card. The bank can take up to seven days to give you their money back even if they won’t give it back in some cases. Whereas a credit card, they’ll refund that money back within 24 hours because it’s their money that they’ll do a lot. That takes a higher-tier approach to take things out. Something to keep in mind there. We have a question, “What does my FICO have to be to get lines of credit?”
Your score does not matter in the approval. Your borrower behaviors matter. The credit score is used after you are approved to determine how much they’re going to give you and what your interest rate is going to be. That is the biggest myth out there. Do not come to me and say, “I got an 800-plus credit score.” I don’t care. What the belief out there is that if you have a high credit score, you can get credit. That’s not true. An 850-credit score does not get you business lines of credit unless you have the borrower behaviors to back it up. You’re going to learn very quickly that we have been fed a load of BS for our whole financial lives. You’re going to learn the truth at the bootcamp.
How’s this different from a company like Fund&Grow? I’ve never heard of it.
Fund&Grow gets you personal credit. They make a sole proprietorship. I know these guys upside down and backward. I have a lot of clients who come to me limping from being damaged from the landmines that these guys throw up. Fund&Grow gets you personal credit to use for your business. They’ll get you a Capital One Spark card, no problem, which reports to your personal. Every time you use it, you ruin your personal profile with utilizations.
True business credit that doesn’t report to your profile gets to keep balances that don’t ruin your personal fundability. If you have a true business card, that doesn’t report, you get to keep balances over here. You keep balances on your personal. How many of you have been using your personal credit cards to fix, flip, buy notes, do all kinds of stuff, and your score tanks and goes back up. That is not relationship-building skills. Nobody wants to lend you serious money like $100,000 business lines of credit.
Fund&Grow gets you these other types of accounts, but they don’t get you business loans and lines of credit. They have nothing to do with that. They’re in for the short term. “Let me get you $800,000 in credit cards.” Using a credit card is not going to help you write a check and do a deal. That’s what I specialize in business loans and lines of credit. We get business credit cards to help build the relationship so that they want to give you more money.
We have another question, “Do you need to have a corporation or LLC, entity or a DBA?” DBA is not a business. DBA is running off your personal.
That’s a marketing name that you use in the marketplace. An LLC can be fundable and an Inc., a corporation, can also be fundable. We have to make them fundable to fit lender guidelines. We’ve got to fit these boxes. It’s easy, but you got to do it.
Which business credit cards do we need?
Business credit cards if they don’t report to your personal profile. In the bootcamp, I’m going to teach you all the questions to ask the customer service reps so that you can vet banks to see whether or not they report to your personal. There’s a formula for asking because they don’t always know or don’t care to tell you the truth. There are the right people to ask and the right way to ask the question.
We have another questions, “What if you have no mortgage on your account? How do you get a first lien line of credit for $400,000?” That would be nice, but there are some things you need to do to be able to qualify for that.
There are ways to do that. My favorite credit instrument in the universe is a first position HELOC. I love those.
We have a question, “What do I do to have my business EIN number?”
Since 2008, there’s no such thing as non-personally guaranteed credit cards, as in cash cards. If you want a Grainger account or Uline account, they do those on your EIN. It is complete mythology BS. There are no cash credit cards, no credit lines in the market and no business loans under $1 million that you do not personally guarantee, over a million full dock asset-based, sure, there’s plenty of those. To get $100,000, $200,000, $300,000, $400,000 in business lines of credit, you will be on the line for it. There is no such thing as cash credit lines, loans and cards for businesses that don’t require your personal guarantee. Anybody who says so is lying and I invite you to email me and CC them and watch the fireworks.
Can you go over what’s included with the platinum one more time?
Platinum is up to two-hour review and taking the documents. I will take your money. If you don’t do the documents, you don’t get to sit down with me because I need the intel. You fill out the documents in the bootcamp. We look at your fundability index, revolving accounts portfolio and entity audit. We take a look at what your end game is. What are your goals? Where you are? We build a blueprint to get you there.
There is also daily coaching and all kinds of other stuff. I don’t even talk about that unless you’ve been to the bootcamp. I don’t even discuss it because I don’t know what you need and where you are. Why talk about buying a car if you need to fly and need an airplane? The platinum is not coaching. It is a one-time meeting where we build a blueprint, so you can implement it based on everything you’ve got from the bootcamp.
We have a question, “What tier is NAV for business?”
NAV is a business provide and the equivalent of Credit Karma. It is not a tier or a lender. It is a brokerage firm for referring you to business accounts. Here’s the problem. Nav will refer you to lenders who report to your personal profile and now we’re back to square one. We have a junky, un-fundable profile that looks like we don’t know what we’re doing.
I’m assuming you want to know what you’re doing and show lenders that you are a strategic borrower and deserve to make money with their money. The personal guarantee is there, but you have to vet a bank to see if their credit line or cards or anything else, reports to personal. I will show you exactly how to vet those banks.
I only deal in business credit that reports to business only. You will never see me give you a lender who reports to personal. You can get quasi-business credit reports from Nav. If you’re paying $53 a month, that means that you are subscribing to business credit reports. If you guys want real intel on your credit score and credit report, go to MyFICO.com.
It is the only place that offers all 28 borrower scores for your personal profile, 28 FICO scores. I don’t go anywhere else. I won’t tell you anywhere else. When you subscribe, you’re going to be told to get one of those credit reports because that’s how we’re going to take it down and see how fundable you are is what those borrower behaviors are reporting to your profile. We’re off to the races.
That was one of the most eye-opening experiences is doing that because it showed me that I had 28 addresses that were showing up on my credit profile that were damaging my credit. I was all over the place because you buy and move. I’ve bought and sold a lot and moved a lot. Plus, different aliases boosted them. It’s well worth it. It’s one of the two classes besides our stuff that we not just recommend.
We demand you to take this. If you want to be a smart and educated individual, this is the knowledge and the information, somebody who started Lexington Law firm with many-year track record and passionate. He is the Credit Messiah to help you see through all the smoke screens, the tricks, the kicking the ass that a lot of these companies are doing that you get you out there.
It’s wicked ugly out there. If I could change my thing, those 26 books, read every one of them. I annotated them for what is true and misrepresentation or a complete lie. I invite you guys to come. If you’re part of the tribe, come on Tuesday and Thursday and join us and let’s keep going.
Merrill, thank you so much for delivering and slashing through those things like a Spartan. If you’ve been a part of that, you can go to Bootcamp@GetFundableBootcamp.com.
Remember, there are no answers. Watch out for all of this misinformation. If you’re a part of the tribe, Tuesdays and Thursdays, you can come and suss it all out. Let’s figure it out together.
You can check out the Get Fundable! Podcast as well.
Thank you. Take this home, make some changes, now you know, let’s start operating from the land of the insider secret.
Thanks again for reading. Feel free to type in your email or shoot me a message at Scott@WeCloseNotes.com. We’ll be glad to add you to Merrill’s email distribution for the eBook once it comes up. Be safe. Go and have some fun, everybody. We’ll see you all at the top.
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