Consider Self- Financing your business. While many people have recently
received funds from the government, it may not be enough to keep your
company afloat in the long run. However, money you lend to your business
is money that you can easily lose. Reduce, or even totally eliminate,
the risk of losing your investment in your business and simultaneously
create a defensible mortgage against your business.
The wrong way to finance your business is to directly invest in your business;
whether to buy the corporate shares (equity) or as a loan to your business.
If your business fails, you are then a stockholder or unsecured creditor.
In either instance, you'd probably reclaim little or none of your
Still, you can secure yourself with the assets of the business, so your
claim has priority over claims of the businesses' other creditors.
To solidify your mortgage against your business requires additional steps.
For instance, a bank could directly loan your business. Your business
would pledge its assets to the bank as collateral. Your bank will lend
to your business if you pledge sufficient personal assets to collateralize
the loan. As a fully secured loan, your bank has no risk. If your business
fails, your bank as its secured party would be the first creditor repaid
from the liquidation. After repayment, your bank would release to you
whatever personal assets you pledged as security.
Don't invest or lend money to your corporation without first reviewing
this strategy with your attorney. Structuring your investment in this
manner gives you two advantages:
- What you invest in your business will be better protected.
- You indirectly control the mortgage against your business and indirectly
protect your business against lawsuits.
Contact The Presser Law Firm. P.A. for a complimentary preliminary consultation.
The Presser Law Firm, P.A.
6199 N. Federal Highway, Boca Raton FL 33487
(561) 953-1050 or e-mail Info@AssetProtectionAttorneys.com