I Need HELP Finding a Better Bank! (Small Business Line of Credit)

Paper_Chase

Paper_Chase

brb gym
Apr 23, 2009
1,499
21
0
Vancouver, Canada
I'm based in downtown Vancouver, Canada. So the big banks are CIBC, TD, RBO, BMO, and Scotia.

I've had my personal and business accounts with CIBC for years. My credit score is 780. After starting my business CIBC told me I need to wait 2 years before applying for a business line of credit. 2 years came last month so I applied. I wanted $25,000. Guess what they offered me? $30,000 at prime plus 7.5%. WTF! 10.5% interest? I have credit cards with less interest than that.

This is a slap in the face by CIBC. I don't know what to do. My business has good financials. 40k profit the first year, 70k profit the second year. Is it because it's an online business?

I want to go shop around now at the other big banks. I don't know who to go with. TD? RBC? Anybody have any recommendations? I could care less about monthly account fee's, I want to go to a bank that will show me some respect and hook me up with a good rate for a line of credit.

In the meantime should I just accept the line of credit at CIBC? I need it right now to pay taxes. When talking with other banks should I let them know the line of credit CIBC offered me? Anything I should or shouldn't say when talking to them? If they are willing to offer me a good line of credit I will transfer all my business accounts, personal accounts, and RRSP. I'm done with CIBC.

Any help/tips is appreciated!
 


Seems fine to me. Business loans are risky as shit, specially online ones.

Needing a loan to pay your taxes... Sounds like you need to take whatever you can get... lol.
 
Don't like debt financing? Sell some equity.

I'll offer you $25,000 for a 45% of your business ;)

experts-oleary.jpg
 
I don't think that's unreasonable at all. I'd take it, if you need it.

Another option is to take a risk, not pay your taxes, and save your money. When you have enough to pay, get a tax lawyer, make a voluntary disclosure, and have the lawyer negotiate a settlement for you. Then just cross your fingers, and hope you get a good tax officer assigned to your case. You could get away with 0% in penalties, essentially giving you an interest free loan, or you could get financially raped.
 
I have read myself some negative with CIBC. If you decide to go with another bank - try and think twice before choosing it.
 
Check out a couple credit unions. Often they're better for really small businesses. As for the line they offered, it's not too far out -- business credit is expensive. However, if you keep the credit line and don't abuse it your ratings will improve and future loans will be cheaper/easier.

Could also take a personal line of credit and lend the money to your business -- there's some tax benefit in here but I've been out of Canadian taxes long enough I forget what it was.

FWIW all the big banks are rule-obsessed, either know your branch manager or expect to get no favours at all.

GL.
 
I know Sprint just borrowed a few billion at 9% recently, so 10% seems pretty normal for a business loan.
 
limitless_08.jpg

You don't pay, you know what we'll do? I'd cut you at waist, peel your skin up over your head and tie a knot in it. You don't die from this. You suffocate.
 
Speak to the head guy in charge of risk and not just an associate. Be professional.

TD worked well. $100K unsecured wasn't a problem.

BMO is very friendly too.

They have both regular LOCs and Credit Card based LOCs.

Source: Experience. About 25% of the decision is based on your ability to ask the right questions/know how they work. About 75% is based on the 4Cs of credit.
 
Jackeyy said:
What are you doing at CIBC ... lol. Working with the wrong bank brother.
Click to expand...

than_west said:
Speak to the head guy in charge of risk and not just an associate. Be professional.

TD worked well. $100K unsecured wasn't a problem.

BMO is very friendly too.

They have both regular LOCs and Credit Card based LOCs.

Source: Experience. About 25% of the decision is based on your ability to ask the right questions/know how they work. About 75% is based on the 4Cs of credit.
Click to expand...

I'm also in the market to get a student line of credit for my wife. RBC is advertising one at prime plus 1% which seems the most competitive out there right now. Do you guys have any experience working with RBC for small business related stuff?
 
Paper_Chase said:
I'm also in the market to get a student line of credit for my wife. RBC is advertising one at prime plus 1% which seems the most competitive out there right now. Do you guys have any experience working with RBC for small business related stuff?
Click to expand...

They all have close the same cost of capital and will "buy down"/"discount"/other banker terms for discounts if they need to do so to win your business.

It can really change quarter to quarter and based on relationships.

Based on experience, BMO and TD are the best managed.

You can also get decent rates via a mortgage LOC if you pledge collateral
 
than_west said:
They all have close the same cost of capital and will "buy down"/"discount"/other banker terms for discounts if they need to do so to win your business.

It can really change quarter to quarter and based on relationships.

Based on experience, BMO and TD are the best managed.

You can also get decent rates via a mortgage LOC if you pledge collateral
Click to expand...

Yea I am planning on checking out RBC, BMO, and TD. I really don't know how much they can tell me about a potential business line of credit without actually submitting the application?

I guess I should just meet with a rep from each bank and see what they have to say. My talking points will be what rate they can offer for my wife's student line of credit and my business line of credit.

Should I tell them I accepted the 30k from CIBC at prime plus 7.5%? I feel like if I do that they will just come in at something slightly lower at prime plus 5% or something and think that is enough to earn my business.

Advice is appreciated!
 
You must log in or register to reply here.
Top Bottom