Archive for the ‘shelf Corporations’ tag
Funding your Startup Business
Haven’t posted anything for some time now, but this is an area that I have been researching a lot almost a year now.
I decided to check a few of those government funded groups to provide new business help and what I realize is that most times what they throw at you is the textbook. This is very much the case in terms of financing. They basically say go and talk to the bank. No creativity at all.
First of all even if you can get a good loan from the bank personally, its a not a good idea long term to do this. In general, its best to form a corporation and get business funding through that corporation.
Now to get to the point about Corporations and funding, one simple approach is to purchase an existing company. Now, I am sure your question is; where should I get money to purchase a company since my goal in the first place is to get funding?
The company you will purchase will not have an established business as such but would have a developed credit profile generated by the existing owners. These companies are called Shelf Corporations. The pricing could be based on the age and other factors like how much funding you can get right off the bat.
I am sure the nagging question. Whats the cost like for something like this? The price range from what I have seen is about $10K to $20K and that gets you a company with about $200K to $500K in funding which is most times a line of credit. Now you could get those numbers with personal credit but this is just the start for these guys, one group I know, provides a Shelf Corporation that gets you about $2M in funding within a 2 year period with not much additional cost. They also help you develop a business plan geared towards funding sources.
In the end, your focus would be generating the maximum $20K to purchase the corporation and then its smooth sailing from there. You may not have to use the money but with funding you have credibility to raise other funds to put your business in Top Gear.
I am thinking of people that lost their jobs recently in this economy, you could use this to fund a franchise business, services, software development or any business type that fits your fancy.
Check out this little write up I did on the topic – Business Funding Guide.
If you want more direct details on sources, let me know.
