By The Wyoming LLC Attorney TeamMay 28, 2022
Starting a business in Florida involves various funding options, including crowdfunding, bank loans, competitions, business incubators, and investors. When considering personal guarantees for business loans, weigh the risks and benefits carefully, as they may extend beyond your business assets. Funding and branding are pivotal aspects of entrepreneurial success in Florida's business landscape.
If looking to fund a business, there are quite a few options available. No matter what the economy is like (good or bad), funding a business is constantly a concern for entrepreneurs. Some ways to fund a business are crowdfunding, bank loans, business plan competitions, business incubators, or investors.
Finding money can be hard, but every business around you did it, and you can too
Are you thinking about starting your own business? An important step to letting “the world” know you are in business and to convey who are you to prospective and existing customers is branding your business. Branding is the easiest way to inform consumers what your business is and what your business offers. customers.
Many people involved in start-ups or small businesses put branding in the backseat and focus solely on funding and product and/or service development issues in their startup phase. This is a critical mistake. Branding, although intangible, is just as valuable as other company assets.
A Business’ brand sets the stage for how customers should perceive your business and often reflects its reputation behind its name or logo. Properly branding your company or business will increase the public’s awareness of your name and logo, create a reputation that instills loyalty and trust in your customers, as well as provide familiarity to bring in prospective customers.
Most people wouldn’t think twice about signing a personal guarantee for their business. However, most financial advisers and business attorneys advise to only do so as a last resort. The reason is, that you stand to lose a lot more than your business and any assets it may hold. You, as the guarantor, could lose personal assets such as your home.
Perhaps the most important factor to keep in mind is that the guarantee will only apply to you, not to your partners or managers. It means that you are pledging to make good on the loan. In some instances, you may be responsible for the loan even if your business is protected by limited liability laws.
Therefore, when you sign a personal guarantee, you are acting as a cosigner on the loan. As such, creditors are legally entitled to come after you in the event the debtor, your business, defaults or misses a payment.
A lender may also seek to have your spouse sign the guarantee. This would put all marital assets at risk of seizure/liquidation by the creditor. However, most states allow for protection against such actions through various innocent spouse provisions.
Guaranteeing a loan for your business demonstrates a strong level of personal commitment to your business, which can provide the incentive to convince a bank to loan you the money. In some instances, however, you may not have a choice.
The Small Business Administration (SBA) requires that any loan they provide must be personally guaranteed by every person with a 20 percent or larger ownership interest in the business.
The “Pay As You Earn” Executive Order could benefit Small Business owners and entrepreneurs. On November 2, 2011, President Obama announced an executive order to accelerate the “Pay As You Earn” student loan program in 2012. The program was originally supposed to begin in 2014. Graduates face tremendous difficulty when it comes time to repay their student debt.
Approximately nine percent of graduates were unable to repay their loans in 2009, up from seven percent in 2008. Because of this financial hardship on recent grads, the current state of the economy, and a general reluctance to fund higher education, the “Pay As You Earn” student loan program was accelerated to begin in 2012. Under the program, banks are eliminated as the “middleman,” in student loan repayments, which will ultimately result in saving money.
Benefits of the Program:
Why is this important to small business owners and entrepreneurs? As graduates have faced increasing difficulty in securing employment in the current job market, many have turned to starting their own businesses. The ability to reduce student loan payments will directly impact these new business owners and entrepreneurs as they seek investment capital, acquire inventory, and secure lines of credit for their new venture.
In conclusion, financing your Florida business involves various avenues. Effective branding is essential for conveying your business's identity and attracting customers. If you're ready to establish a Florida LLC and need assistance, you can reach us through our contact form or call +1 (307) 683-0983. Our team of experienced paralegals is available to assist you in navigating the process.