Tag Archive for: EIN

Business Credit: 5 Simple Steps To Get Started

It is imperative that investors take the time to set up their business correctly from day one. In doing so, they can easily get onto the fast track to success. Alex Erlich, a credit advisor and educator, is joining us today to discuss the steps investors need to take to win the investment game. Let’s take a closer look to discover the five simple steps to get started.

Getting started is daunting! Here is what you need to get in it to win it.

First, Personal Credit

Make sure that your personal credit is setting you up for success. The majority of investors use their personal credit for business expenses. As a result, the utilization rate begins to have a negative impact on personal credit scores. By identifying and separating personal expenses from business expenses, you can in turn get your credit score back on track. 

Second, Identify Your Business

It is important that you not only identify the type of business you are starting, but the corresponding subcategorization as well. Banks will look at the NAICS, also known as the North American Industry Classification System, when you apply for business financing. 

Third, Select a Business Name

How do you select a name for your  business? Will there be a parent company? It is imperative that you select a business name that represents your company, and that your name is available within your state.

Fourth, Set Things Up Correctly 

Establishing the company properly through the secretary of state, applying for an EIN, applying for a business license, and opening business accounts for expenses. Setting this up correctly ensures that both lenders, as well as clients, see it as a business.

Fifth, Set Clear Goals

Be very clear with your goals from day one! Where do you want to go with your business, how many properties do you need, do you need to buy machinery? 

In Conclusion

Starting a business is overwhelming. Taking it step by step will result in not only helping your business succeed, but it will also have a positive impact on your personal life as well. We have created a guide that will help you step by step through the process of starting your business. This includes links to all of the important websites that you need for your specific state. We are here to help get you on the fast track to success.

Contact us today to find out more about setting yourself up for success.

Need more tips and tricks? Watch the full interview with Alex Erlich



Starting Strong: The First 4 Steps for New Real Estate Investors

How do you set your company up to win? As a new investor, there are 4 steps that new real estate investors should take. These steps will not only set you up correctly for lending, but they will also protect you in the future. As we’ve discussed before, real estate is all about money and leverage. Consequently, businesses that are not set up as an LLC or company, will not be approved for a commercial loan. By establishing your business correctly from the beginning, you will in turn set yourself up to win. So what are the four steps that a new investor should take? Let’s take a closer look!

First, Set up your business name

It is imperative that you select a business name that represents your company, and that your name is available within your state. Something to remember when selecting a business name is to not include real estate terms within the name itself. In looking into the lending world, about ⅓ of lenders find it unfavorable if you include “real estate”, “fix and flip”, or other real estate terms within the business name. To get started, go to the Secretary of State page for your specific state.  Then select the business tab, and finally locate the link to search name availability. After you have researched name availability, it is important to register your business name with your state to make it official. 

Second, Set up an EIN

Once you have successfully selected and registered your business name with the Secretary of State, it is helpful to talk with your accountant or lawyer. They can help to guide you through the process of setting things up correctly not only for your state, but for the IRS as well. Businesses need to apply for an EIN in order to open business accounts. The EIN is the federal employer identification number for business owners. It’s like a social security number for your business. This can be set up directly through the IRS website.

Third, Set up your bank account

The next step that you should take as a new investor is setting up a business bank account. It is important to set up business bank accounts as soon as possible to begin separating personal and business expenses. Lenders will often look at what you have in your bank account to assess your financial stability. By separating personal and business accounts, it can make the underwriting process go faster.

Fourth, Make yourself known

After you are correctly established as a business, it is important to make yourself known! By creating a website, securing an office space, and filing with 411, businesses can obtain a greater client base. Completing this process within the first year of forming your business, further establishes your presence within the community.

In Conclusion

As a new investor it can be overwhelming. In order to win, it’s vital that you set up your business correctly from day one. We can get you started by providing a step by step resource guide for new business owners. This guide is state specific and includes direct links that will get you on the fast track to success.

Watch our most recent video to find out more about The First 4 Steps for New Real Estate Investors

Do you have more questions about setting your business correctly? Do you need additional information regarding lending options or business credit cards? Contact us today!