Renatus Students and Business Credit Application Options

Hi, Mark Kohler here. Excited to spend a few minutes with you and the Renatus community. Man, I'm so honored and excited to be a part of the community. I think many of you don't even know what an amazing thing you may have found. The Renatus education is second to none. And I've been so grateful to be a part of the project and known Bob Schneider for years. And I think many of you, the more you learn, the more you're going to love what you found. Now, I'm excited to spend a few minutes here with you to talk about business credit and where you're headed with your business. Now, a little background in a nutshell is I'm of course one of the Renatus instructors. I'm a CPA and attorney and I help clients all around the country every day establish their business and structure it properly for tax, savings and future growth. So this business credit thing is a really, really important topic and I want to make sure that you have the right options and make the right long term decisions on what type of business credit approach you take. So I'm going to run to the whiteboard here in a minute and give you some of those alternatives, give you some suggestions and hopefully point you in the right direction. And I want to again say thank you for taking a few minutes to watch this. Okay, so let's talk about this business credit. And that's the first point. It's business credit, so it's going to be booked as a transaction in your business as a liability, and the interest that you pay is going to be tax deductible. So we want to make sure we structure it properly. And I'm going to go through three different options of how you can book the business credit. Because when you go to do your tax return at the end of the year, you're going to need to let your account know. I have a business credit line and this is what I'm using it for and where it's been moved around and this, that and another. So let's keep that in mind. Business credit. Now, your first option is to use a current company that you already have. Now, for some of you, this could be a great fit. You've got a business that's been established for several years maybe, so it's got a little bit of history. Getting this credit line on there would be fantastic. It would be building that corporate credit type of concept. So that's wonderful. It's going to already have a current ein, an electronic identification number. You're going to want to Use that on your application for the business credit because this is the company you're using. It's already got a time frame, it's already been around. So that's good. It's got some history. And the other thing to keep in mind is that I want you to apply with your current company that's an S corporation or your operational entity. We're typically not going to apply for this credit line in an LLC that's going to buy a rental property. We'd want to get this credit line in an operational business. That's the theory. It's a, it's a business credit line. It's not a property loan. That's a different scenario. Right. So as you've watched some of my online videos, some of you already, we want to split your life into operations and holdings. This business credit line is going to be on the operations side, which is typically going to be AN S Corp 99% of the time. Another chapter in my book. So that's your first option. So number one is going with a current company you already own and that's going to be the borrower and that's what you're going to put on the application in the ein. It's great. It's cool. That's great. Option one. Now your second option is to start a new company. Now if you start a new company, you're going to get a new ein. And typically I'm going to recommend, this is probably going to be an S corporation. It depends. And this is, we're going to talk about your options to set up this new company here a little bit later. But typically it's going to again be a S corporation for your operations. And what's nice here is that you're going to be just like in your current company, you're going to be able to run multiple operations in this corporation. I mean it could be Internet business consulting and services, commissions and then doing some real estate. Also once you get the credit line here, you can suck the money out as a, either a distribution or we could loan it to an llc. And that's where you're going to maybe buy some long term real estate. So it doesn't mean you can't use this credit line for long term real estate. But we want to fund the operational entity, then extract the money from there and fund the LLCs if you're going to do some long term projects or even partner with others because that'll be a new entity if you're going to partner with others. So the new company could Be great. Now I want to mention this rather than, and I'll show a distinction here, your third option is to do no new entity. You're just going to set up a sole prop or a sole proprietorship. Now with a sole proprietorship, and I usually use a little lines, it's not a formal entity. And so ultimately you're going to have to set up a company because you're going to be growing your business. That's the purpose of this. It's going to be startup capital for education and, and buying property and equipment and all that good stuff. If you're getting EIN here and you're just gonna let the lender apply for that ein, just do a sole proprietorship. But once you're ready to set up an entity, this sole prop goes away. And so why it was gonna provide a distinction here is if you set up a new company, you're gonna be establishing that company name, that ein, that business credit so that you can build this moving forward. So if some of you know that you're gonna have that long term perspective and goal here, you might as well just set up the new company. It's going to be more efficient than setting up a sole proprietorship where you just get a basic EIN and then this will ultimately be dissolved because sole proprietorship is not going to be your long term entity that you're going to ultimately own property or do business in. This is just kind of a short term fix. Now the good thing about option three is it's cheap and easy. So you're not going to, it's not going to cost you anything to just get the sole proprietorship going. So for some of you on a tight budget, option three might be better. Option two, you're going to spend a little money to get this set up, but it'll be done and you'll have that long term structure ready to go. And then for those of you that already have a current company, wonderful. Let's use it and let's clean it up. Some of you may need to do maybe a prior year tax return or do some books and we have a little cleanup service too. But I want to talk about some of your options here for a moment on the cost to set up one of these entities and to clean up one of these and what some options are. So you can go out and price these and maybe even use our service if you need it. So we'll come to that in just a moment. Alright, so now let's talk about some of your options for setting up a new company. Or even cleaning up one of your old ones. Now, I speak about this as a consumer advocate in a lot of ways because that's the theme of my first book, Lawyers are the truth about protecting our assets is there's. There's so many scam artists out there that want to overcharge you to set up maybe something a little too elaborate. Also, there's those online Internet services to set up entities where you really don't know what you got and if all the pieces and parts are there. So we've designed a couple options at our office, and I want to just explain it so that you have something to compare when you go out there. I don't want to make this sound too salesy, but this could be a really good help for you as you go out and again, shop for setting up your entities. So if we're going with route number two, and we're going to set up two different. We have two different options for setting up an entity. And some of you may have seen that little flyer about describing some of this in your online area or something that you can see that. Okay, sorry, I'm going to start over again. No, no, you're good, you're good. Okay. All right. Finish it up. You're good. Keep doing it. Okay, so now let's talk about your options for setting up an entity. You've really got two, and I'll focus on those here in a moment. But I want to say I really feel like a consumer advocate in this area. And this was a theme in my first book I wrote, Lawyers Are Liars, is that there's just so many scams out there. People that oversell entities and charge too much, they don't even give any decent advice along the way. They just kind of scare people into entities. And then there's the online services where you're not sure what you got, and even though it was cheap, you end up having to clean it up a year later. So I want to give some options, and I don't want this to be too salesy, but really is kind of a, again, a consumer advocacy role. I want to tell you what you should expect out there and some general prices that we charge. And you can use this if you want. And I think it'll give you some more ammo to find the best decision and best option for you. Now, some of you may have even got that flyer where I described the three options and then setting up so you can reference that, too. And that could be in your business center or something like that. Now, your Two options for setting up an entity, and this is really what we feel nationwide is really what they are is number one is using a paralegal service. And we have a paralegal service at our office. We've got a discount and a website that you can go to for renata students only, 10% off. So I'll give some pricing here. So, you know, but this paralegal service is awesome. You're going to get your articles and your bylaws and your operating agreement. You're going to get the stock certificates, you're going to get the corporate book, the tax ID number, the S election, all, all these pieces and parts should be included. But with the support of a paralegal, now we charge 400 bucks for an LLC or 450 for a corp. 10% off, you're under $400. Then there's going to be a filing fee depending on what state we set it up in. But again, very, very affordable. When you start to compare, our service is cheaper than LegalZoom. When you go to LegalZoom, they say 99 bucks to set up an entity. But then you're going to click all the boxes you're supposed to and it'll add up more than this real quick. So this is your paralegal service to shop around. You're going to be in that range of 400 to 450 and make sure you get all the pieces and parts. If some of you think, oh, I can set up an entity online for 50 bucks at the state and I can get my tax ID number online for free, okay, that's only a small part of setting up an entity. You need all these pieces and parts to open a bank account. And if you ever get sued, all this is going to play into it. And if you get audited by the irs, they need to see all these documents. So it's much, much more than just going online for 50 bucks and thinking you can knock it out on your own and skipping all this. So that's just a word of caution. Now your other option is going with a full service. Now this is where you could again go down the street and talk to a lawyer in your area. Be careful for people that are not lawyers trying to set up entities for you, CPAs should not be setting up entities and certainly not some guru that's going to set up the entity for you. That's the unauthorized practice of law. So you need a lawyer in this mix that can prepare the entity. Now, if you do an online service where there's no Advice, it's fine. You don't have to be a lawyer to just set up an entity. But if they're going to give advice, that's where the lawyer comes into play. So we help clients in all 50 states and get on the phone and do that. But then what's nice about the full service and this is going to be again locally, shop around is you should get all this paperwork and get the consult and support that a lawyer should explain. Which entity are you choosing? Why? If you go to meet with your local attorney and you say, hey, I'm thinking of doing real estate and I'm doing some other projects, I'm getting business credit and you're teaching them more than they're teaching you, you got the wrong guy or gal, right? So make sure you get that full service support that you're going to be paying for. Now, we charge 800 bucks for a full service entity and we include all the attorney support, maybe an hour or two hours over the phone, multiple times if needed regarding the setup. So so many, many clients have found that very, very affordable and supportive. And again, 10% off that for Renata students, you're looking like it's 720, so pretty good deal. So as you get out there, look around for this. Now for those of you that already have an entity and maybe you haven't taken care of it and you know what I'm talking about, you've got a pile in the drawer and maybe you set up it online and you've never got these kind of guts to the entity. Get it cleaned up. There's services you can use for that. We're going to charge three or four hundred bucks to just get the meat and potatoes done with a corporate book. And that's going to help give you the asset protection of the entity and audit protection that you need. So these are your options. So when you're going to sign on for business credit, make sure that you've got the right entity, that your entity is cleaned up. And then if you're not going to choose an entity, go sole proprietorship route. That's wonderful. It's cheap and easy. Just know that you'll ultimately graduate over anyway, that that ein and that business credit will go away on that ein. So hopefully this is helpful and I just want to say a few more words, but thank you so much for listening. Well, I'd like to just share a few parting thoughts, and these really come from the heart. I want to challenge all of you to not be too impatient and to stay the course and not give up. I went to school 11 years to become a tax lawyer, and then it took me four or five more years to just figure it out. And I know, ladies, I look a little younger than that. But seriously, it takes a lot of time to build a small business and to also be good at a particular industry or skill set. Too many people, I think, go to a weekend seminar or go to a couple classes and then think, oh, well, this was a bad idea. The business didn't work. No, no, no. Take your time. Continue going to your weekly meetings, the monthly meetings, and don't give up. Continue to build other sources of income. Keep the day job, whatever it takes. This other source of income you might be building here and the other assets you could be building will pay off in the long run and give you more security and help you better achieve that American dream. Well, I'm not going anywhere. I'm going to be here, a part of the Renatus community for many years to come. And I'm grateful to be here. And please listen in to all the calls. Come check out the classes. Listen to my watch my class. I. I hope I share something that will help you in your quest as well. But don't give up and don't expect quick, quick results. Some of you may have that experience and make money right away doing some things, and others it could take a year or two, and that's okay. This is not a get rich quick scheme. It's a dream that takes hard work but can really pay off. So I wish you the best and God bless you and I'll see you around, I'm sure. So keep living that American dream.