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I understand that I will probably have to do at least one of these anyway. Which is better? I am not an accountant or lawyer and have limited experience in loan

I understand that I will probably have to do at least one of these anyway. Which is better? I am not an accountant or lawyer and have limited experience in loan-getting, corporate registration, private stock transactions, etc., and would like this to proceed with as little interruption or distraction as possible. So, let's get this straight: you are not registered as a corporation, and you don't have an accountant? It sounds like you want to hire an advisor to walk you through this. Do you have any contacts (among your clients and colleagues, perhaps) who could put you in touch with an advisor? Failing that, are there any business incubators nearby, or the Small Business Administration? One more thing: if you think that "banks are sketchy and questionable" and you don't trust them at all, I wouldn't be putting my hopes into finding "some benevolent businessmen."

cookiecaper 16y ago
I am registered as a corporation (LLC) and I do have an accountant. However, my accountant is a consultant I retain for a few hours every few months to go over tax filings, and I am assuming that stock configuration and dispersion is a bit more complex than registering a LLC. Maybe I'm wrong. This is still very much a small business, "mom-and-pop" thing. I would like it to grow to something a little less "mom-and-pop"-y, and additional liquid assets would assist greatly in doing that. Having some cashflow history and not going out of business in the last year, I thought that this might be possible at this point. If you don't think it is, that's fine, please let me know that I still have a while to go before anyone would want to invest.
- eggbrain 16y ago
  IANAL, but I don't think you can have stock as an LLC, You'd need to be a C or S corp. As for wanting to make it something bigger than a "mom and pop shop", that's fine, and you not going out of business last year is great, but you WILL go out of business if you try to expand with money from loans or stock if you don't have the clients to back it up. You are cash flow positive right now, work on getting more and more clients. Once you are at capacity for the work you can do, add on more contractors. You won't (and shouldn't) get loans to try to boost up your business, you get loans by looking at trends in your cash flow (I am growing by 3 clients a month, but I don't have the ability to work that much), and getting loans based on that (Example: I've been making a steady $2k in profit each month for 24 months, growing at 500/mo. Based on that, I'm going to get a loan for $50k, and pay it back over the next 5 years.)
- michael_dorfman 16y ago
  I'd start by retaining your accountant as a consultant for a few additional hours, to run these questions by him. He should be able to tell you pretty quickly how easy/difficult/costly it will be to incorporate as a C or S corp, and issue stock. Either way you choose to raise money-- via bank or investors-- there is going to be a fair bit of pointless (to you) paperwork, and silly hoops to jump through. Get used to this idea. It is part of the price of doing business.

cookiecaper 16y ago

I am registered as a corporation (LLC) and I do have an accountant. However, my accountant is a consultant I retain for a few hours every few months to go over tax filings, and I am assuming that stock configuration and dispersion is a bit more complex than registering a LLC. Maybe I'm wrong. This is still very much a small business, "mom-and-pop" thing. I would like it to grow to something a little less "mom-and-pop"-y, and additional liquid assets would assist greatly in doing that. Having some cashflow history and not going out of business in the last year, I thought that this might be possible at this point. If you don't think it is, that's fine, please let me know that I still have a while to go before anyone would want to invest.

eggbrain 16y ago
IANAL, but I don't think you can have stock as an LLC, You'd need to be a C or S corp. As for wanting to make it something bigger than a "mom and pop shop", that's fine, and you not going out of business last year is great, but you WILL go out of business if you try to expand with money from loans or stock if you don't have the clients to back it up. You are cash flow positive right now, work on getting more and more clients. Once you are at capacity for the work you can do, add on more contractors. You won't (and shouldn't) get loans to try to boost up your business, you get loans by looking at trends in your cash flow (I am growing by 3 clients a month, but I don't have the ability to work that much), and getting loans based on that (Example: I've been making a steady $2k in profit each month for 24 months, growing at 500/mo. Based on that, I'm going to get a loan for $50k, and pay it back over the next 5 years.)
michael_dorfman 16y ago
I'd start by retaining your accountant as a consultant for a few additional hours, to run these questions by him. He should be able to tell you pretty quickly how easy/difficult/costly it will be to incorporate as a C or S corp, and issue stock. Either way you choose to raise money-- via bank or investors-- there is going to be a fair bit of pointless (to you) paperwork, and silly hoops to jump through. Get used to this idea. It is part of the price of doing business.