A new investor asked me, "Can I buy land in my LLC and still get a loan?" Yes. In fact, we only lend for business purposes, and most of our borrowers buy in an LLC. Here is what that means and what you need.
Can I get a land loan in my LLC?
Yes. Private land lenders lend to LLCs all the time, and most prefer it.
A business purpose land loan is made to an entity, such as an LLC or corporation, to buy land as an investment. You flip it, split it, sell it on terms, or hold it to resell. Title goes in the LLC's name, the loan is in the LLC's name, and you sign a personal guarantee.
Buying land in an LLC?
We lend to entities for business purposes. $30K to $1M, no appraisal, close in about 7 days.
Get a Free QuoteApply NowWhat does business purpose mean on a land loan?
You are buying the land to make money, not to live on or use yourself.
A business purpose loan funds an investment. Flipping land, subdividing, selling lots on owner financing, and buying to resell are business purposes. Buying a lot to build your own home, or a cabin for your family, is personal use. Federal Truth in Lending rules exempt credit made mainly for business purposes (12 CFR 1026.3), which is one reason private lenders stick to business loans.
We lend for business purposes only. At closing, you sign a certification that the loan is for business.
Do I still need a personal guarantee?
Yes. Every one of our loans carries a personal guarantee.
A new LLC has no track record and no assets except the land. The guarantee means you stand behind the loan. In my experience, lenders that skip the guarantee make up for it with lower loan amounts or higher rates.
What documents does my LLC need?
Formation papers, an EIN, an operating agreement, and proof the LLC is in good standing.
- Articles of organization (or certificate of formation)
- Operating agreement showing who can sign
- EIN letter from the IRS
- Certificate of good standing from the state
- ID for each guarantor
Have these ready before you apply. Missing formation papers are one of the most common reasons a 7 day closing turns into 14.
Should I form the LLC before I sign the purchase contract?
Ideally, yes. If not, assign the contract to your LLC before closing.
Title and the loan must be in the same name. If you signed the contract in your own name, most contracts let you assign it to your LLC. Tell the title company and your lender early so the documents match. I would avoid switching names in the last two days before closing.
Rule of thumb: the name on the contract, the title, and the loan should all match.
What can an LLC not use our loans for?
Anything other than buying the land.
We fund land acquisition only: no construction, entitlements, or site work. Land must be 1 acre or more with legal access, and not in CA, AZ, NV, NY, NJ, ND, SD, or VT. See the full terms on hard money land loans and what lenders look for in land loan requirements.
Frequently Asked Questions
Can an LLC get a land loan?
Yes. Damen Capital lends to LLCs and other entities buying vacant land for business purposes, from $30K to $1M.
What is a business purpose land loan?
A loan used to buy land as an investment, such as to flip, subdivide, or sell on terms, not for personal use like building your own home.
Do I need a personal guarantee on an LLC land loan?
Yes. Every Damen Capital loan carries a personal guarantee.
What documents does my LLC need for a land loan?
Articles of organization, an operating agreement, an EIN letter, a certificate of good standing, and ID for each guarantor.