Prime's lease deal. The math gets done.

Thanks David, I was beginning to think that I was the only one who understood what I was talking about.
I know if a person is going to travel he really needs to have a credit card But to use it when the business goes south is the worst thing that can be done. The interest alone will eat you up if you've got to really get into it. Unless you can pay it off each month, and if you're in trouble, that's not going to happen. Go to some of the sites that tell you how many years it takes to pay off your card(s) if you pay the min payment. So, you call the credit card company and tell them you would like a break or can you skip a payment, what do you think they're going to say?
But, if you have a small business loan, a line of credit or whatever from your bank you have a better chance of getting some help. The bank does NOT want you to fail. They don't want your truck or your inventory or your house. So for those reasons they want you to be successful.
I've seen what using credit cards to TRY to keep a business afloat can do. BTW just think of what happens to your credit rating, if you don't pay or you're late. Now, of course, all of you who are wallowing in cash don't need to heed this advice... LOL

 

There's one tremendous difference. All the cash in an LLC passes through to the owner(s) in the same way that all the cash is looked at in sole proprietorship as belonging to the individual. In other words, the IRS gets their hands on it at the higher personal rates, including interest on accounts maintained for the business. You get to file on schedule C, which rolls over onto your 1040.

An S-corp is a corporation (an independent legal entity,) and as such can maintain it's own accounts separate from the owner(s) or employee(s). A corporation then can maintain emergency funds, escrow accounts, etc., can keep profits, taking advantage of corporate tax laws and lower tax rates. The owner/employee (you) only has to pay personal income tax on whatever you decide to pay yourself. It's also a legal firewall between corporate assets and your personal wealth.

 

The income an S-corp makes passes through to the owner exactly like a sole proprietorship/partnership does. Don't let the "corp" part fool you. You get the personal asset protections of a corporation but you aren't taxed like one.

A C corp is taxed as you described.

An LLC can elect to be taxed either as an S corp or a C corp. That is one of the beauties of an LLC. Depending on the revenues of a corporation you may want to be taxed as and S or a C. It depends on how much you are making. An LLC elects its tax status when it is formed. It can however change this during its life. When I started my company we elected to be taxed as an S corp. After 2 years the revenues increased to the point it made more sense to switch the tax status to a C corp. We didn't have to restructure the company (like we would have had to if we had formed an S corp vs. an LLC) all we needed to do was change our election with the IRS.

 

I'm referring to credit in it's many forms, not just credit cards. But those fees and higher interest are because the credit is unsecured. So yes, if you're going to use credit cards you'd better be sure. But if you're going to use a HELOC or secured credit, you'd better be ###### sure. Either way if things go south, your credit is going to tank and fees will be tremendous. It is a distinction without a difference. But with credit cards you're not banking your home against your business' success.

 

I give up...

 

#1 rule in business: Never Use Your Own Money! LOL

 

Post your credentials and contribute, by all means.

Do you know anything about the stock system, shares, banks loans, cd's, bonds, what the money is used for how the lending system works, it's purpose, why most corporations are mortgaged to the hilt, why all national governments borrow,what it takes to create ecomonies of scale?

I do.

Dave Ramsey is to the credit world what AA is to alcoholism. He serves a valuable purpose for those that need that kind of direction. There is nothing universal or even practical on a world scale about his teachings.

 

As do I, some I learned in school, but most I learned in real life. I know a lot about real life bank loans, real small business loans and making a business work or not work. And I know a lot about credit cards. You don't have to be a college graduate or a brain surgeon to know these things. A lot of it comes from good old common sense and having a banker who teaches you things while helping you succeed. I'm sorry if in some way I've offended you, but I've stated what I know as have you. And now I am done.

 

That Dave Ramsey went bankrupt and walked away from the debt (never repaid it). I do like his now debt-free ways now though.

 

Everyone I know flubs their credit at least once. I know I did. But I also knew that you couldn't do much without it, at least the kind of things I was doing.

With credit there is always going to be risk. You can list them off one by one all day long. But it's also a very good thing used to your advantage. Heck life is risk. Marriage is risk. You can't have good credit unless you use credit. With it, you have your own fort knox and wide array of opportunities open up to you.

I spent over two years learning the ins and outs at a forum, eventually modded that forum. Help lots of people repair and create credit. There are a lot of good methods to do it. Took me about a year to clear everything up and get some good lines going. In my present condition switching careers, I don't know where I'd be without it, but I'm guessing not good.

Even one point less on your home mortgage is up to a couple hundred a month off your payment. Suddenly the risk of paying $20 or $30 a year in interest fees on a couple cards isn't so bad for the track record.