At Credit Counsel Elite, we teach my students and mastermind members that one of the best things you can do to improve your credit reach and get even more leverage is to create a business entity.  A business is how you can take credit and hypercharge it to your . 

Once your business is set up properly, and you are persistent and actively looking for the right banks, which I teach my students how to do.  You can take your business to ridiculous levels, way beyond what you could do with only personal credit.  You can get to one million dollars in credit in just one year and then keep on scaling that to larger amounts using business lines of credit and business credit cards.  However, the most crucial part is to create a solid foundation.  

Decide on Your Entity

You want to create the entity on a budget and then set it up in the right state with the right name to ensure that you are successful.  

I personally recommend an LLC for company formation.  The reasons are that an LLC is both easy to create and maintain.  This is also important because an LLC can help out with the end goal that we are trying to accomplish: getting as much funding as possible.   

A corporation can be excellent; if you have several different people as part of the corporation, each individual could get credit lines for that business in the future.  However, from my understanding, a corporation is more difficult to keep and maintain, which is why the LLC leads for me.  

LLC Creation Options

If you have never gone through the process, you can hire an attorney to walk you through everything, but in my opinion, this is a costly process and not worth it, especially if you want to open more than one company.  

Legal Shield is a service that charges $35/month, and you can get a will set up for free.  Legal Shield can help you walk through the process.  

INCfile.com is also a resource that can help you file.  Several other competitors can do the same service.  Depending on your state of filing, there may be several options.  Once complete, you will receive a binder with all of your documents and a breakdown of what’s needed for the year’s record keeping.  

A state business administration office or corporation commission can help you with guidance on what documents are needed as well as what is needed for an article of origination that is published in the local paper.  

You can google the process and then go to your local government office or online and set up the company.  Then go through IRS.gov to create an EIN number.  

Once you have done this a few times, you can always do it on your own faster and cheaper.  

Remember that each person, each business, and each entity will be different, so getting some legal advice is advised.  

Organization

Once you are formed, you will want to have a spreadsheet of all of the company’s information that is easy to access.  There will be a lot of moving pieces in the near future, and staying on top of everything is critical.  With our next foundation article, this will become clearer.  

In what state should I form?  

This depends on your business.  Deleware, Wyoming, Nevada, and Ohio are all popular locations for protection and cost; Ohio is $100 to set up, and no annual fee after.  But you may want to have the company formed where you are doing business, or you can do a foreign filing.  

To get the most credit, you want your LLC to be local, or with an out-of-state LLC, you want to do a foreign filing to get local credit.  Your ID will help out with business credit, and it will show your state.  The foreign filing might cost you more than setting up locally.  

Business Names

For naming, you don’t want to have a real estate or credit-related name (“Properties,” “Investments,” “Credit/Credit Repair,” or “Homes,”) but “Management” is a better choice.  Banks don’t like to lend to these two segments, and this can limit your options.  You can, however, do a doing business as(DBA) which is your brand and can have that name.  The LLC name can be hidden behind a DBA.  

Make your name as generic as possible and short.  You can do a name search through your state’s Secretary of State website for the desired name to see if it has been taken already.  Lenders will be looking for your name so make it easy for them to find.  

If you already have a business with one of these real estate or credit/investment-related names, don’t change it.  A change is worse for seeking credit.  There are plenty of lenders that can help you and give you credit; you may need to do more searching.  You can still get credit and be set up for success in the future.  

Insurance

While not totally needed, there are several types of business insurance that you can set up to provide you with added protection.  

At Credit Counsel Elite, we teach business owners how to get up to $500K at 0% interest every six months; for more information, CLICK HERE