Forums: Discussions for entrepreneurs and small business.

Hi,

Just ask yourself, if it’s that easy to jumpstart your career as small business owner, why doesn’t everybody do it that way?

Following this line of thinking, the established line of credit would well cover the purchase price of the shelf corporation, so how could you go wrong?

In reality, however, the benefits of using a shelf corporation are much more limited. There can be no doubt, that using a 2-year old shelf company with an established FEIN, DNB number and Paydex score may give you access to unsecured credit with vendors such as Dell, Office Depot, Staples, and the like, but a $300,000 credit line – I doubt this very much.

If it’s a bank that provides the credit facility, whoever established the line of credit agreed and promised to inform the bank of any material changes to the business and the nature of the business. A sale of the company certainly qualifies as such.

Now, the reason why they “provide the CFO for 90 days” is probably that the CFO is a signer on the account that is linked to the line of credit. They will likely add you as an additional signer on the account, and after 90 days, the CFO drops out.

If you are lucky, the bank just revokes the line of credit, because you didn’t inform them of the “material changes” to the business and you thus violated the credit agreement. One could even think of this practice as credit fraud.

If you take the $300,000 line of credit out of the equitation and you still feel that using a shelf corporation will be beneficial, then I think it might be worth exploring. If you’re thinking about it just because of the credit line, stay away from it.

I hope this helps.


Mark



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Jackson Steiner
http://www.JacksonSteiner.com

Advanced Document Design for entrepreneurs, intermediaries, and the financial services industry.
http://www.Publications.FastVentures.com

Hello everyone - I'm a new member and decided to join because it looks as though there are some knowledgeable members here. I was wondering if I could get some input from anyone experienced in corporate credit and funding.

I recently came across an aged company that has a 50k line of credit, Dun and Bradstreet financial rating and Paydex already. I checked with the sec of state and all filings are up to date. The corp has a physical address, local phone and listed in the 411 directories, and even a corporate website that comes with the purchase. I have pretty good personal credit (710 fico) and the individual that owns the corp has told me that the credit line (it's a private lender not a national bank) will transfer as long as the new owner has a 640 fico or higher.

Does anyone know if this is true or not? I'm considering buying this corporation but want to be sure before I pull the trigger as it's a sizable investment (7k). I hope I'm allowed to post the website in case you need to take a look - here it is.

That amount of money is very expensive up front.  We market two plans:

 

1.  $350K to $550K Lines ( avg. funding $490K ), $4800 up front & at funding 11% due SERVICER plus our Broker Fee

 

2.  $150K to $225K Lines ( avg. funding $210K ), $2800 up front & same as above

 

GUARANTOR is a multi billion dollar Corp. and they remain on for a full year after funding. Corp. stands on its own after.

 

Visit:   amazingbusinesscapital.com

 

Takes about 12 to 14 weeks to complete process.

When buying a Shelf Corp be sure to never pay up front fees. If you must, use a system that has an escrow feature. I've heard of many people getting scammed when paying up front fees. 

I recently came across a new website called Verifico that offers all sorts of funding services, both business and personal. They had PG and NO PG Shelf Corps listed. They claim that all services on their platform have been verified effective and safe, and they also use an escrow feature when dealing upfront frees. Here is the the link to the Shelf Corps I saw listed on there site Verifico Non PG Shelf Corp

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