Capital Stacking Miniseries

It is honestly shocking to me that people still don't know what business credit and capital stacking are. So if this sounds like you, just give me 30 seconds of your time so I can explain it to you because trust me, this is how the top entrepreneurs got to where they are today. To start with, business credit is something that every business owner needs to have.

Business credit does not show up on your personal credit report, so as you use it, you're not taking down your personal credit. When it comes to capital stacking, hence the name, you are stacking credit, but it comes in the form of business credit. This all comes at 0% interest for up to two years with funding amounts up to $200,000, but the kicker is that it doesn't require any financials at all, making it a great choice for startups.

Why is there a fee to do capital stacking? I get asked that all the time. Aren't you just sending out credit card applications? Why on earth should I pay a 9.9% fee? Well, here's why. We work with a company that has been doing capital stacking since probably the time it was invented. They're very good at it. They understand the formula behind it. They look at your personal credit. They know which ones are going to be a good fit. They apply. They know when to apply, how to apply.

Additionally, they know how to negotiate to get you higher offers. Typically, we're finding that people that work with our team get anywhere from three to eight times the amount that they can get if they do this on their own. But what's more important is to consider this. Yes, there is a 9.9% fee. I never hide that. You pay that after you receive the funding. Most people pay for it with the funding, so you're essentially making payments on it. But you have to look at it this way.

With capital stacking, you're able to access a lot of capital without financials. It's money that you wouldn't be able to get any other way. But how you have to look at it is what you're going to make with that money. So, for example, I help a lot of real estate investors. Sure, let's say they get $100,000. It costs them almost $10,000. They're able to then turn around and use that on a flip and make anywhere from $60,000 to $100,000.

And when I ask them, hey, Joe, was it worth paying that $10,000 to be able to make $70,000, $80,000? Their answer is, absolutely, a million times over. And while I wish everything in the world was free, unfortunately, when it comes to borrowing money, there is a price. But you have to look at what you'll be able to make off that money and does it make sense to you.

How can you liquidate credit cards? I get asked this question a lot. One of my favorite types of funding that I talk about in many videos is capital stacking. It's where you're getting large amounts of business credit, doesn't reflect on your personal credit, comes at 0% interest for up to two years. However, business credit comes in the form of credit cards. And many people say, oh, I don't want credit cards, I need cash.

Well, you can actually make, turn these into cash and here's how. Well, the biggest thing you want to avoid, you don't want to go to the bank and do a cash advance. Not only is that going to be a pretty large fee, but that's also going to jump up that 0% interest rate to now a cash advance rate, which can be upwards of 20 to 25%. The better way, there's two ways. If you have to pay somebody, they only want cash, you can use a company called Plastique.

They'll pay the invoice from the credit card. They'll run it just like a purchase, which keeps you at that 0%. They charge a nice low. I believe it's 2.5%. Or if you're using it for real estate, which I'm a huge fan of, we work with an attorney that creates an escrow account and he liquidates up to 85% of that card's value into that escrow account.

Still runs it as a purchase, keeps you at that 0%, there's your down payment. For that process, you're paying usually right around 5%. And of course, nobody likes paying fees, but unfortunately, that's the cost of borrowing money. You got to look at what you'll be making from that money. But the big point to also look at is most of these business credit cards are reward cards.

So let's say, for example, you liquidate them. Let's say you liquidate $100,000 and it's all reward cards. You earn points for every dollar spent. Well, once you've racked up $100,000, $100,000 points, or sometimes even more, you turn around, convert those over to cash. You're darn near reimbursing yourself for that 5% or 2.5% that you had to pay to liquidate that card.

Let's take a moment to talk about capital stacking and the effect that it will have on your personal credit. And what I'm really talking about is inquiries. So in full and complete transparency, there is no way to get funding without a hard inquiry prior to the funding process, whether you're buying a home, a car, credit card, whatever it is. In the case of capital stacking, it's done strategically so that, yes, you will get hard inquiries on your personal credit, but it's done so that Experian, you might get one, TransUnion one.

Equifax won because we are getting you cards that are pulling from different credit bureaus. And yes, there's no way around it, but that minimal amount of inquiries is not enough to bring down your overall credit score. But what's even better is you can get inquiries removed that did not result in a debt, and business credit will not show up as a debt on your personal credit, so you can remove those inquiries.

And I'm super happy to say that with every client that runs through capital stacking with us, we'll send out the information. We now have an amazing program using the power of AI that can help you get those inquiries removed. It is completely free. You do have to get a credit monitoring service. It's $29 a month. We still have one anyway. But you will be able to remove those inquiries yourself after you go through that round.

But the more important question is this, is getting a couple inquiries that you can absolutely remove later worth having access to up to $200,000 in capital at 0% interest for up to two years in business credit that doesn't show on your personal credit report that also doesn't require any financials? You tell me, is that worth it?

Why should you take advantage of capital stacking? What will this money do for you? That's a question I get asked all the time. If you've been watching any of my videos, you know that I talk about capital stacking a lot. It is hands down my favorite type of funding for any business owner out there. Why should you choose it? Well, let me just give you an example. Capital stacking can get you up to $200,000 without any financials. Think about that for a second. No financials. Do you really think you can walk into a Wells Fargo?

And tell them, hey, I'm a brand new business. Haven't even made a dollar yet. Can I borrow $200,000? I don't want to provide any financials. And can I get that done in 14 days? Can you imagine the response? They'd laugh you out the door. But in all seriousness, it enables you to get capital, to grow, expand, buy real estate, whatever it might be. It gets you capital that you wouldn't be able to get any other way. And it gets it at a very affordable price.

And sometimes people say, well, why do I have to pay to borrow this money? Well, let's look at it this way. A lot of people borrow this money for real estate, for doing flips. So for example, let's say you're going to use this money, your capital stacking for a flip. You're going to use it. You're going to make $70,000 when this deal is done. You borrowed, for example, $100,000 with capital stacking. You paid that 9.9% fee, which roughly was $9900. You really want to tell me that it's not worth paying $9900 to turn around and make $60,000, $70,000? And the reality is, if you didn't use the capital stacking, you wouldn't have made a single dollar. So let that sink in for a minute. Is it worth it to you?

Does it make sense to use capital stacking to purchase real estate? The answer is absolutely yes. You can use it for anything. In case you're feeling a little lost, capital stacking is stacking business credit. It doesn't reflect on your personal credit report. It all comes at 0% interest for up to two years. So in the case of real estate, the best way to use capital stacking is if you are doing the BRRRR method or if you're just doing straight flips, and here's why.

So let's say you don't have the money for the down payment, or maybe you do have it. You don't want to use your own capital. You use capital stacking for that down payment. Let's say it's $40,000. You use that capital stacking. You buy that property. You do the rehab, which you can also use capital stacking for, because in case you didn't know, while the lender covers 100% of that rehab, it is self-funded, meaning you do a little bit of the work, which you pay for.

The lender comes out, inspects it, and reimburses you. So if you're using that capital stacking, you're not tapping into your own funds for that rehab process. Then you finish that rehab. You flip it. You turn around. You pay off that capital stacking. And guess what? You now have that available again to move on to flip number two. Or in the case of the BRRRR method, right?

You get that renter in there. You do that cash out refi. That's when you can turn around and pay off the majority, if not all, of that capital stacking. And in the case of DSCR loans, the case of buying a rental, yes, you absolutely can use capital stacking for that down payment. However, it's trickier to pay it off completely. So my best suggestion is, sure, maybe use capital stacking for some of that down payment.

But I would not suggest it for the whole thing, because at what point are you going to be able to turn around and pay that off? That's the question you have to ask yourself. It might make more sense to maybe use the capital stacking for half of that down payment, right? And that way you can pay it off, because with a DSCR loan, it is figured out so that you will have 15% profit every single month.

You know, for a while, you could take some of that profit and apply that towards paying down that capital stacking. The point is, you can make real estate happen for yourself. You just have to get a little creative and look beyond the normal methods that most of us have grown up believing you have to use in order to do anything.

What should you do when the introductory 0% period is ending on those business credit cards that you got with capital stacking? The worst thing you could do is close those cards when that 0% ends. The benefit of business credit is that it does not show up on your personal credit report, kind of like invisible debt, but you still have to pay it. It does come at 0% interest, sometimes up to two years.

However, many people panic, and they don't even take the funding because they think, oh, well, when that period ends, what am I going to do? Relax. There is a clear solution. So in many cases, if you've taken a round, you've done a round of capital stacking, you've gotten that business credit, when that 0% period is ending, if you've used it effectively, you can come back for another round of capital stacking and take advantage of another round of 0% and do balance transfers.

Or there is another way. You can actually put to use a great balance transfer strategy. So every card will have a different intro period. Some might be 12 months, some might be 15, some might be 18. What you want to do is the card that's going to, I don't want to say expire, when that 0% period is ending first. You want to focus on that card. You want to use it, but you want to make sure you pay it down or pay it off by the time that 0% period is ending.

As it's drawn to a close, you want to call that card issuer. So, hey, Chase, I've really loved using your card. I'd like to do a large balance transfer. Do you think you could spot me and extend a 0% balance transfer period for me? And so let's say they give you another 15 months at 0%. You then transfer the next balance over and you keep doing this repeatedly.

It's kind of like a game of leapfrog, but this is how you can extend that 0% period for several years. And the worst thing you could do is close those cards because you've been building this business credit history, which in turn is going to help you get more business credit. Because the more you use this business credit, you pay it down, pay it off, you'll be amazed how many new 0% offers and credit line increases you'll be getting.

I like to think of it as the gift that just keeps on giving.

In today's episode of answering all possible questions in regards to capital stacking, we're going to talk about what the process actually looks like to apply for capital stacking. I'm going to give you a big hint. It's very easy. When it comes to capital stacking, the biggest piece that I love is that you can apply without getting a hard inquiry. It's very important.

It's what we call a soft pull only, meaning we pull back the covers on your credit, but we do not actually give you a hard inquiry just to see what you qualify for. The actual application process takes no more than 10 seconds. We're asking for very basic information. We don't need your EIN or business information. We're asking for very basic information, name, phone number, address.

We do ask for your social, but I assure you that you are providing this in a locked, secure lender portal. That information doesn't even go back to us. It goes directly to the underwriting source and we do not, nor do our funding sources sell your information is completely private and secure.

Can you get high limits with a new LLC when it comes to capital stacking with business credit? So the beautiful part about capital stacking is you can do it with a brand new LLC and you can get high limits and here's how. So the beauty of capital stacking is it's unsecured. It doesn't require any financials. It doesn't require any collateral. What it does look at and what it does require is a strong personal credit profile and how you can get those high limits, even though you're a new LLC, is if your personal credit profile is very strong.

Because we're looking at your credit profile, what we're looking at is what are your current credit limits on your personal credit? And typically what you can look at, let's say you have your highest limit on your personal credit is $5,000. On a business credit card, you can usually look to two or three exits, so $10,000 to $15,000 on one card. But we stack it, which is how we're getting large amounts, how we're getting up to $200,000.

But I'll be honest, I've seen people with $60,000 limits on one business credit card. So it's not necessarily based on the age of that LLC, but instead it's based on your personal credit profile.

When is the perfect time to see what you can qualify for with capital stacking? Easiest answer for this, there is no perfect time. And here's what I mean. The beautiful part about applying for capital stacking is that unlike other types of funding, you do not get a hard inquiry just to find out what you qualify for. I'm a firm believer in knowing what I have to work with.

I don't like waiting till the last minute. I don't like guessing. I have so many people that get themselves involved in business deals, real estate deals, and they get involved in these high numbers. And then they come to me and they're like, hey, I need money for the down payment. And by then it's too late. They don't know what they can qualify for.

Sometimes they don't qualify for as much as they had hoped. And it's really a backwards process. So my best advice to everybody, if you're considering using capital stacking for any type of funding, whether it's real estate, business, whatever, take the time, find out what you qualify for now. Doesn't hurt your credit. That way you know what you have to work with.

But more importantly, let's say you don't qualify for any, or you don't qualify for as much as you wanted. You'll always know the reasons why. And that'll give you a good roadmap of things that you can be working with in the meantime.

When is the best time to apply for capital stacking if you're going to be using it for real estate? I talk all the time about how capital stacking is the perfect complement for real estate because you can use it for that down payment. However, the piece that most people get confused with is when is the right time to find out what you qualify for? Most people go out, they find a property they like, they get it under contract, and then they come and they're like, hey, Sarah, I need some down payment funding. Let's see what I can qualify for.

Totally backwards, and here's why. For most real estate transactions, you're going to need anywhere from 10% to 25% down. If you go out and you start looking at, let's say, four, $500,000 properties, you don't even know if you have access to that 25% that'll be needed. What's worse, getting it under contract without even having a single clue where you're going to get that down payment from.

One of the best parts about capital stacking is that you can apply without touching your credit. So no hard inquiry. So my best advice for real estate investors, or really anyone considering capital stacking, take the 10 seconds it takes to apply. Find out what you're pre-qualified for. That way you know when you're going out to look for properties, what price range you should even be looking at.

Does capital stacking always come in the form of business credit? And while yes, the ultimate goal with capital stacking is to get you significant amounts of business credit, the important thing to understand is that because it is unsecured funding, the main requirement, what we look at is your personal credit profile. And in many cases, that personal credit is not quite strong enough to support a large amount of business credit. You have to build that up first.

So many times when you apply for capital stacking with us, the offer will come back as a business and personal combo. And this isn't necessarily a bad thing because the personal still comes at 0% interest. And oftentimes personal credit has a longer 0% interest period. But more importantly, it's solving that problem you have. You don't have strong personal credit.

This will help you get that personal credit. And for many people, they need as much funding as possible. They have a large real estate project that they'll be able to turn around and pay off quickly. In those instances, it absolutely does make sense to take that business and personal combo.

Is capital stacking personally guaranteed or just with business credit? So in the case of business credit, in the case of capital stacking, it's unsecured funding, right? We're not asking for financials. You're not giving us any collateral to tie it to. So like in the example of a home loan, right? They've got that home they can take back if you default on it.

In the case of capital stacking, if you default on it, they have nothing. They have nothing to take back. So with business credit, while it is attached to your EIN and it doesn't show up on your personal credit report, it is still personally guaranteed. It doesn't affect your personal credit. It just means if you decide, hey, I'm going to stop paying on this forever, they will find you and it will eventually affect your personal credit.

So with business credit, while it is attached to your EIN and it doesn't show up on your personal credit report, it is still personally guaranteed.

You may be considering capital stacking, but the piece that's stopping you is that you think it'd be high payments each month and that you're worried you can't afford it. I really love when I can absolutely blow your mind, and in this case, I will. So the big benefit of capital stacking is that the business credit comes at 0% interest up to two years.

Well, what's really eye-opening is when you're not paying that interest like you probably are on your personal credit cards, your monthly payment goes down significantly. So in the case of capital stacking, if you just are staying at that minimum monthly payment, which some cases you have to do, especially when you're just starting out a business, your minimum monthly is $100 per month for every 10,000 you spend.

So look at it this way. If you spend $100,000, that's your balance, your minimum monthly payment would be $1,000 a month. Now I do all types of funding, and I'm going to tell you, I don't have any funding other than capital stacking that has such a low minimum monthly payment.

If you do capital stacking, do you have to use it all within a certain amount of time? Absolutely not. You can hang on to it forever because how capital stacking comes, it comes as business credit, which comes as business credit card. We all know with credit cards, you can use them however you want. The piece to consider with capital stacking is that these credit cards come with an introductory rate of 0% interest from anywhere up to two years.

And you can absolutely extend that 0% by doing another round of capital stacking or a balance transfer strategy. But the one thing to consider with capital stacking is you don't have to use it all up. So let's say you get $200,000 in capital stacking. You're not going to instantly start making payments on that $200,000. You determine what your payment is.

You determine how you spend it. If you want to sit on it and spend it little by little, have at it. Or if you want to spend it all at once on a real estate project, absolutely. Point is, there's no requirements on when you use it, how you use it, and what time frame you use it in.

Can I do capital stacking on my own, Sarah? And if so, why on earth would I need you? I get asked that all the time, so I thought, let's just set the record straight. So when it comes to capital stacking, it's nothing I invented. It's not private knowledge in any way, shape, or form. It's free information on the internet. There is a strategy to it. You have to know when to apply to which companies to know which bureau they pull from.

This is something you absolutely can do on your own, but just because you can doesn't mean you should, and here's why. A few years ago, I had a client. I will call her Carol. She received a great funding offer for us. I believe it was right around $100,000 in business credit. And she said, Sarah, why on earth would I pay a success fee? I could probably go out and get the same amount on my own, and that's what I'm going to do.

And I certainly would never stop somebody, so I said, feel free. Go ahead and try, and let me know how it goes. In a very short period of time, Carol came back to me, tail between her legs, asking, hey, Sarah, can I actually get that funding offer from you? My results weren't so great, because what happened was Carol thought, well, they can give me an offer for that much. I can do this on my own.

So she went out. She applied to American Express. She did get a card for $10,000. That was great. And then she subsequently went and applied to six more credit card companies for business credit. And here's what happened. With each of those applications, she got a hard inquiry, and she got denied, because she didn't do the process correctly. And they all saw each other's inquiries and saw that new debt. But here's what's worse. When Carol came back to me, asking if that offer was still valid, because she was ready to go, that offer suddenly went from $100,000 down to zero, because she now suddenly was showing six new inquiries.

So moral of the story. I know nobody likes to pay fees. I don't like to pay fees. But when it comes to capital stacking, that fee is worth it, because you are working with a team that knows exactly what they're doing and how to do it right to get you the best results. And typically, we see that we are able to get clients three to eight times the amount they could get if they went out just like Carol and did it on their own.

Follow this step-by-step process to successfully borrow money for your business without having to provide any financials and have to show any revenue. There's this great thing called capital stacking. It is a great funding solution for any business. Amounts up to $150,000, comes at 0% interest for up to two years, and comes as business credit so it doesn't show up on your personal credit.

However, because it doesn't require any financials, it does require you to have a strong personal credit profile in order to get the best results from capital stack. It's worth putting in a little effort to make sure your personal credit is in tip-top shape. First thing first, when it comes to capital stacking, they're looking at your highest limit on your personal credit cards.

So best rule of thumb is if you have good standing relationships with your credit cards, no late, successive inquiries, anything like that, go ahead and try to get credit line increases. Limit your inquiries, especially the six months prior to applying for capital stacking, you want to make sure you have four or less. Zero is ideal, but definitely four or less.

And if you have the ability to do this, using the 80% strategy, racking up your credit card balance to 80%, turning around and paying that off within three billing cycles. The reason why this is so valuable is when it comes to applying for business credit, lenders look at that and they see that you have increased capacity and you are a responsible borrower, which then in turn allows them to give you large amounts of business credit.

Can you use capital stacking to purchase an Airbnb? I love it when I can tell people yes. Yes, you absolutely can. And here's how I suggest it. Of course, you can use it for the whole purchase, which I don't think you can find too many Airbnbs for under $200,000, which is the cap on capital stacking. But where I do suggest it is you can use capital stacking to help you with that down payment.

Because typically when you're buying a rental, you're going to be needing about a 25% down payment. You can use capital stacking to help offset that. Additionally, you've got to furnish that Airbnb. And I know that's not super cheap. Capital stacking is a great way to use that. Furnish that Airbnb. And remember, you're borrowing it at 0% interest, so it's very, very cheap capital.

I want to share with you just how easy it is to liquidate those credit cards that you think are just useless. There is a way to liquidate credit cards easily and quickly. We are partnered with an amazing liquidation expert that can liquidate up to 90% of that credit card's value and turn it into that cash that you might need, for example, for a real estate purchase.

And here's how it works. You fill out some basic information on yourself and your business entity. They do all the work. They liquidate those credit cards. That money is then wired to either an escrow account if you're using it for a real estate transaction or to your bank account if you're just looking for cold, hard cash. And yes, nothing in life is free.

They do charge a small service fee. However, remember that if you are using these cards for business purchases, any and all fees are tax deductions.

What do you do when your 0% promo period is ending on all the cards that you got through capital stacking? I get this question all the time, so let's break it down. First, during the 0% promo period, make the minimum payments. Make them on time, make the minimum payments. You're not paying any interest, your payments are low, that way you are keeping as much capital as possible in your pocket and in your business.

Then, as that 0% period is coming to an end, make a very large payment to drastically pay it down or even pay it off if you can afford to. Why you want to do that is you are telling those banks you were using strategy, not desperation. Now, here's where you get smart. If you still have a balance when that 0% ends, you have a couple options. The first one is to do a balance transfer onto another 0% card.

By now, you've probably gotten a lot of 0% offers in the mail. If you take advantage of one of those, there you go. Or, if you've paid down your balances and they're very low, call the card issuer and see if they will extend to you a promo period on all balance transfers. Many times they will if you've been a good user. But what if you want more funding?

What if you're like, I want a capital stack again. I want to do a round two. It is very important that you keep your credit pristine, just like you did when you first got capital stacking, or improve it. So, no new debt, no late payments, no excessive inquiries. That's how we find the best results. And if you got a lot of cards on your first round of capital stacking, we often find we'll get better results by using a separate LLC on that second round.

Want help planning your next stack? Click the link in my bio. No hard pressure. No hard inquiry. Just smart strategy. That's what we're all about.