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re: Starting a small business and next steps?
Posted on 4/21/16 at 3:44 pm to cast away
Posted on 4/21/16 at 3:44 pm to cast away
quote:
I've considered having my wife's name on everything and co-signing on it.
As I mentioned earlier, our house is in my wife's name. Her median FICO credit score is 840. My initial thought was ... get the business in my name, based upon my 800 credit score, put up 20 % (minimum) and if it fails, come after me - and house would still be ours.
After learning through here that it may not be that simple as I thought, should I ask her to go all in with me (assuming there are real advantages)?
4
Posted on 4/21/16 at 4:34 pm to Will Cover
quote:
As I mentioned earlier, our house is in my wife's name. Her median FICO credit score is 840. My initial thought was ... get the business in my name, based upon my 800 credit score, put up 20 % (minimum) and if it fails, come after me - and house would still be ours.
After learning through here that it may not be that simple as I thought, should I ask her to go all in with me (assuming there are real advantages)?
Not exactly the same but an example. I am in commercial construction as a general contractor. On several of our jobs we have requirements on having so much of our subcontracts have to go to a WOB, MOB, SDB, etc. So we are having to target subs that have these statuses in order for us to meet our requirement.
Posted on 4/21/16 at 4:36 pm to Will Cover
my wife and I are in the same housing/credit situation as you are it sounds like.
I read elsewhere(not here) that there are special programs offered to women, in the realm of starting up a business, that wouldn't be available to you or I.
I will probably look strongly at leveraging whatever benefits are offered to women, via Mrs. Cast away and hope she never leaves me
What timeframe are you looking at to start the business?
I read elsewhere(not here) that there are special programs offered to women, in the realm of starting up a business, that wouldn't be available to you or I.
I will probably look strongly at leveraging whatever benefits are offered to women, via Mrs. Cast away and hope she never leaves me
What timeframe are you looking at to start the business?
Posted on 4/21/16 at 6:46 pm to cast away
Will, there a big advantages in the SBA Loan world to giving your wife 51% of the business. Now that may sound nerve-wracking to you, but I know a HUGE contractor here who moved from North Louisiana about a decade ago whose been doing gangbusters since Katrina and he signed everything into a female family member's name (immediate) on a 51% level.
There are still protections you can put in place surrounding ultimate control, but I'll say it again...Definitely something you should spend some time Googling...
There are still protections you can put in place surrounding ultimate control, but I'll say it again...Definitely something you should spend some time Googling...
Posted on 4/21/16 at 11:01 pm to Will Cover
Adding your wife would certainly be helpful, from both the woman owned side and the collateral side.
Consumer credit and commercial credit are fundamentally different in how they're underwritten. Consumer credit is almost completely score driven. Commercial credit is cash flow/collateral driven.
So for this loan, your 800+ FICO is great, but it's based on an income (job) that's disappearing. So it's not a great indicator of your capacity to pay going forward. Since the business is a start-up (for you, at least), there is no documented cash flow, only projections. The remaining variable is collateral. The more collateral you can pledge, the better your chances.
None of this is to discount the importance of your ideas, the business plan, the nature of the business and how you're planning to achieve success, but it's the over-riding factor.
Consumer credit and commercial credit are fundamentally different in how they're underwritten. Consumer credit is almost completely score driven. Commercial credit is cash flow/collateral driven.
So for this loan, your 800+ FICO is great, but it's based on an income (job) that's disappearing. So it's not a great indicator of your capacity to pay going forward. Since the business is a start-up (for you, at least), there is no documented cash flow, only projections. The remaining variable is collateral. The more collateral you can pledge, the better your chances.
None of this is to discount the importance of your ideas, the business plan, the nature of the business and how you're planning to achieve success, but it's the over-riding factor.
Posted on 4/22/16 at 10:01 am to cast away
quote:
loansharks)
This is what I am interested in. Where do I find one?
Posted on 4/22/16 at 10:15 am to carlsoda
quote:
Where do I find one
head for the dodgy end of town
Posted on 4/23/16 at 9:15 am to Will Cover
Make her 51% owner of your business and it will make things a little easier. More avenues open up. Doesn't make your path simple, but eligible for many preferences.
For it to matter though she has to be legitimately the majority owner of the business.
For it to matter though she has to be legitimately the majority owner of the business.
Posted on 4/23/16 at 5:22 pm to diat150
quote:
or llc taxed as a scorp
this for me worked out best, was a savings in taxes but I pay out less Social Security (so build less credits) than as a llc.
Posted on 4/23/16 at 5:25 pm to RockyMtnTigerWDE
quote:
Make her 51% owner of your business and it will make things a little easier. More avenues open up. Doesn't make your path simple, but eligible for many preferences.
For it to matter though she has to be legitimately the majority owner of the business.
interesting. will look into that.
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