How some people get unsecured $75,000 loans, at 0% interest.
Sounds unbelievable. Of course, there’s some caveats, but read onward; the next few paragraphs could open your eyes to something that few people know about.
The conventional way:
So we know that banks won’t personally lend you a penny on routes. You can pull some money out of the routes in the form of a loan by bringing in the truck titles that you acquire with the routes. Local banks will often loan around 50% of the value of the box truck. Most of the time, small banks have never even done loans on box trucks and don’t really know the value so they will loan only on a smaller amount of the total value. But that’s usually not even close to enough money to purchase the route; it’s just a way to help you pull out a bit of money if you needed to.
Update: As of 2017, I’ve finally found a contact for SBA loans where they’ve been successful at getting multiple loans funded for routes at excellent terms. It depends on the deal, but if you have around 10-25% down for the route you’re looking at, I encourage you to personally evaluate the options that an SBA loan can provide. Check out your SBA loan options here.
But what if you needed a loan for $50-$100k? There is a way…
If you have excellent credit there’s a little known way of generating revolving, unsecured credit for any business you’d like to get involved in. Many companies will do this but require established retail businesses and take their repayment in the form of a percentage of the transactions done with a credit card.
These types of loans aren’t granted when it comes to routes because we’re not a retail business.
Also, the loan companies that say “$100k loan, bad credit OK” are usually scams. Avoid them! In order to get a legit unsecured loan, you’re going to have to have excellent credit.
The unconventional way:
There’s only one legitimate way to get the loan you need from a major institution, and that’s from credit card liquidators. They’re exceedingly savvy at knowing which credit card companies are still issuing new credit cards, are masters of knowing how your credit is reported, and are amazing at finding the best interest rates.
Not all credit card liquidation companies are created equal! Some are not good at responding for help, some don’t have the same connections others have in terms of getting you the most credit, and some charge ridiculous fees.
SO HERE’S HOW YOU CAN GET A 0% LOAN FOR A FEDEX OR BREAD ROUTE.
These liquidation companies will apply for credit cards to banks that they know are issuing high limit cards and also have low or 0% interest rate promotions. They will often get you $50,000 to $100,000 worth of credit cards, of which those cards will almost always come with a initial liquidation checks.
You can write those checks to yourself and deposit them in your account. Usually, the rates are 0-1.99% depending on the bank and your credit. These are NOT cash advances, which can cost you over 20% in interest! These are low percentage APR introductory offer checks. You can pay them off as quickly or as slowly as you wish. Unlike a typical bank loan where you pay a fixed amount each month for years, you can pay a high amount one month and a lower amount next month. Also, you have that credit available to you for the remainder of your account with that bank just like a normal credit card. Contrast this with having a bank loan and when you pay it back, if you need more money you’ve got to go through the whole approval process again for another loan.
Considering how lucrative many routes can be, you can often pay back the loan within the 1 or 2 years the introductory APR exists. And you can often get away with paying 0% to 1.99% on your loan as long as you pay it back in time. Once you do the calculations, you can see that doing this leaves you in a better position than a traditional loan AND you’ll end up paying less overall in fees.
Be aware, a good liquidation company can cost around $6,000 in fees to get you to pull out the money off the cards. Despite this, you’ll discover that little bank fees here and there (application fee, origination fee, etc) can add up to be even more expensive than a liquidation company. Compound that with the likely higher bank interest rates, and you’re still paying more with a bank vs doing credit card liquidation.
Doing this can affect your credit, but it’s an option to at least know that it exists, even as ridiculous as it sounds. But you need to at least discuss your questions with the liquidation company and leave negative presumptions about this process out of the picture while you’re still learning.
I only work with and suggest one liquidation company out there – please contact me if you’d like me to make an introduction for you. I’m sure there are other good ones out there, but I’ve seen many people have great success with this one. I’ve recommended them for so long they have recently brought me in as an affiliate, but I’m only going to continue that relationship as long as they treat my clients well – so please let me know of your experiences there. Regardless, they will be able to get you the full details on the program and you can determine for yourself if the program is right for you or not.