Starting a business can be a daunting but exciting task. There are countless things to consider before taking the plunge; from creating a plan and budget, to finding the right investors, vendors and employees. One of the most important aspects of starting a business is building your credit, which is often one of the biggest hurdles entrepreneurs face. Fortunately, corporations and Limited Liability Companies (LLCs) have the ability to build their own credit in order to access financing for their business endeavors.
Having multiple corporations or LLC’s gives you more borrowing power than if you only had one entity. Having several entities also allows you to diversify your funding sources and manage credit risks better as well as gain benefits that come with doing business with multiple lenders. For example, lower interest rates can be accessed when dealing with several creditors instead of just one. Additionally, having several corporations or LLC’s mean that you have more options when it comes to loan types such as lines of credit or term loans that best suit your purposes for different projects.
While having multiple entities may seem like a complicated structure, it does not have to be difficult when done correctly. You should work closely with an experienced team who can help set up each company in accordance with state regulations as well as recommend tax strategies that fit your individual situation. It’s also helpful to establish an ongoing relationship with lenders so they become familiar with your businesses and recognize their value; this helps build credibility which makes it easier to obtain funding when needed. Not only will this increase your chances of getting approved for loans but also provide access to more flexible terms and lower interest rates over time.
Ultimately, understanding how corporations and LLC’s work together will give you an advantage when seeking funding for business endeavors; having multiple entities gives you more borrowing power while also providing added financial flexibility through different loan types and terms offered by various lenders. Working closely with experienced advisors who understand both corporate structures as well as financing options can help ensure success in leveraging all available resources in order to build strong foundations for long-term success in business ventures.
Schedule a call today with one of my experts http://www.calendly.com/stephan-sr-strategist or call my office for a complimentary consultation at 775-384-8124.
Scott L. Arden, CEO Controllers, Ltd www.controllersltd.com
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