|
Because one of the questions on any financial application is "how long
have you been incorporated?". If you wait until you decide you may need
to be, then yes they are going to want personal guarantees when the
answer to the question is "1 year" instead of "5 years". And I didn't say becoming a corporation is the answer to avoiding the PG's... but the other way around, you will never avoid the PG if you are a sole proprietor. ;) Travis Microserv Tom DeReggi wrote: The mistake many make is that they think they should incorporate to protect their personal finance/liabilty from the business. Well, actually, its the opposite. A business needs to be protected from personal finance/liabilty. The government is smart enough to understand why a grant or loan recipient needs to be protected from one's personal finance and liabilty. Thus the need to be a LLC, Corp, or S-Corp. Other than simplicity, a Sole Proprietar does not offer anything a LLC and Scorp cant, and for that reason, I'd agree, that if someone wants to be treated like a safe sound business, from a financier, they should move beyond a Sole Proprietorship. I'm not saying Sole Propritorship does not have its place, jsut saying, the second third party money is needed, the business has evolved beyond the purpose of a SoleProprietor in my opinion. The beauty of it though is.... A Sole Proprieorship can easilly be converted to one of the other type businesses at any time.Also, Travis, being a Corp is not the only thing necessary to get beyond the personal guarantee. From my experience, lendors have asked that the borrower employ at least 6 employees, and show proof of their payroll in the financial reports, and/or do over 1 million dollars a year in revenue, to be considered large enough to bypass personal guarantee. As well, many times have asked for atleast three unique stockholders or principle in the Corp. Its much harder for a Corp owned in full by a single stockholder/founder to bypass a personal guarantee requirement. I think this is one of the reasons sometimes small WISPs stay a Sole Proprietorship longer than expected. If they know they dont meet the other requirements to bypass personal guarantees, or to secure loans by business financials alone, (revenue, diversity in ownership, # employees), whats the point? They might as well make their accounting life easier. Tom DeReggi RapidDSL & Wireless, Inc IntAirNet- Fixed Wireless Broadband ----- Original Message ----- From: "Marlon K. Schafer" <o...@odessaoffice.com> To: "WISPA General List" <wireless@wispa.org> Sent: Monday, May 25, 2009 11:54 AM Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital AvailabilityOne more thing. I don't agree with your definitions per se'. We all have businesses. A proprietorship is a TYPE of business. We are a proprietorship because I'm not incorporated (incorporating is over rated and expensive to do right). I'm still a business though.... http://en.wikipedia.org/wiki/Business http://en.wikipedia.org/wiki/Sole_proprietorship http://en.wikipedia.org/wiki/Asset marlon ----- Original Message ----- From: "Charles Wu" <c...@cticonnect.com> To: "WISPA General List" <wireless@wispa.org> Sent: Sunday, May 24, 2009 10:03 PM Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital Availability |
-------------------------------------------------------------------------------- WISPA Wants You! Join today! http://signup.wispa.org/ -------------------------------------------------------------------------------- WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
