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Just the other day I suggested to a client who invests in real estate to apply for the Home Depot Business Rewards MasterCard funded by Citi Bank. It is one of the few cash credit products that doesn’t require a personal guarantee as long as the business has excellent credit. I went to Home Depots website to apply for the card for my client, and I didn’t see the application. Which prompted me to call customer service to investigate. I was informed by a customer service representative that the card has been discontinued by Home Depot. Home Depot stop taking applications for it the first of December, and existing card holders would be transitioned into receiving a Citi Bank business credit card. This is just another example of business creditors changing their lending programs faster than business owners can establish Corporate credit files.
Wells Fargo has made significant changes to its business credit programs. Six months ago Wells Fargo discontinued there secured business credit card. Which is a much needed product for a start up business in this current economy. They also changed the guidelines for their corporate account credit card. Last year a business was able to establish up to 100k line of credit solely in the company’s name without a personal guarantee. Now they require personal guarantees on all their business credit cards. I spoke with a business relationship manager based in California for Wells Fargo on the phone. He informed me that a company would need strong business credit scores from D&B and Experian to qualify. In addition to having excellent personal credit. In other words 50% of the approval is based on business credit scores, and the other 50% on Fico scores.
Bank of America recently established a market in Michigan, and they don’t offer any business lending or leasing in the state of Michigan. A branch manager told me that earlier this year Bank of America was going to roll out special lending programs for start up businesses, but changed their mind several months before the full takeover of La Salle Bank was completed .They still offer a business credit card. However the business credit card had a 35k limit several months ago, and it has been decreased to 25k. Currently Bank of America basis the approval solely on your personal credit report. I find it strange how a bank as large as Bank of America doesn’t check a business credit report. A business could have tax liens, judgments, and behind in all their accounts & Bank of America would never know their making a high risk loan. They also discontinued their 203k program, which was backed by HUD.
If banks keep tightening their commercial lending requirements it’s my prediction they will further hinder the economy from rebounding. We need more small businesses to create jobs, offer services, and innovative products to help the U.S. economy grow stronger. Large corporations like General Motors bullying the Federal government to bail them out because of weak financial management. Strengthens the fact Americans can’t place their financial security in the hands of CEO’s of large corporations.
I recommend business owners to use due diligence when selecting a financial institution. If they don’t support your dreams and goals, why support their bottom line. Credit unions are now starting to cater to business customers. If you can’t find a bank you like visit your local credit union.