It will be fine
Well-Known Member
SBA saved me 1% point on the loan. On Deck is the lender of last resort at a 30% rate. I find it amazing one person can be so wrong so often. It's truly a talent.
Glad I'm out of this Part2
- Thread starter bacha29
- Start date
Some do. Paying someone "off the books" isn't beneficial to anyone unless done over a three year period. I doubt it happens very often if ever due to insurance purposes in the contracting business.
The contractor lowers his workers comp bill, that's the benefit.
The contractor loses the write off. $35-40k of profit is quite a bit. He also runs into the issue of non employees getting in accidents. I'm not saying it doesn't happen. I would imagine it would mostly for "fill in" types. I also think the contractor that does this is a fool. If the IRS finds out (which they do with one pissed off employee) any benefit is quickly erased.
Bounty and OUMick: you guys nailed it. It is a very unstable investment platform. Think of it from the bank's perpective. It writes a $200,000 loan to a guy to but some routes. Six months later the guy for one of several possible reason defaults. What does the bank then have, a couple of worn out trucks sitting out in the yard with termination notices slapped on the windshield.
Great points guys. In the sate that I live in,if you get caught with what are unquestionably employees and youhave no workmans comp on them the fine can run nas high as $250,000 and up to 3 years in prison, A few years back this guy over in na neighboring county had a sawmill. An employee in the mill was badly injured and the judge threw the book at him
As you said before you did not own a route. I would love to go into details of the nonsense x has pulled over the years but I am not going to go into details on this forum. I will however do my due diligence in terms of my legal rights and make the proper authorities aware of everything.The contractor loses the write off. $35-40k of profit is quite a bit. He also runs into the issue of non employees getting in accidents. I'm not saying it doesn't happen. I would imagine it would mostly for "fill in" types. I also think the contractor that does this is a fool. If the IRS finds out (which they do with oneoff employee) any benefit is quickly erased.
Pssst. The proper authorities are in on it.
Just in case they miss anything. The squeaky wheel gets the grease, and I'm going to squeak!
Every business for sale has "good will" built in. No bank will touch any loan unless you have your own collateral. It has nothing to do with Fedex. The banks have found a way to escape any risk with SBA backing the loan.
It will be fine
Well-Known Member
Dead on. The Small Business Act was created to protect large financial giants.
Mr. IWBF I now know what you mean when saidthat "It will be fine." Anytime I needed to borrow money I went directly to the bank. Not once did I ever take the loan risks and dump them into the taxpayer's lap in the form of a SBA loan quarantee. The risks were mine and mine alone. Health care? Every month I get a premium bill and it's not subsidised. But when it comes to finding a way for the people you want to give you the best years of their lives to pay their medical bills you dump that into the laps of the taxpayers So anytime while in your pursuit of entrepenurial excellance you create a problem for yourself that's bigger than you can solve you just take it and dump it into the taxpayer's lap. Yet you have the audacity to ridicule and talk down to the people who take responsibility for their own actions and are not always out there looking for somebody help shoulder the load. What you call a personal attack. I call the facts.
What country do you live in?
It will be fine
Well-Known Member
I didn't write the laws. I didn't create the system. To leave money on the table is foolishness not nobility.
Again. Please find me a bank that will lend money for ANY business other than SBA. The only way that happens is if you have enough collateral to back the loan. What you did in the past for loans is not possible anymore unless you could liquidate and pay cash. This isn't the US of 25 years ago.
I had enough collateral to back the loan. You see I didn't go diving into this too deeply because this venture would support only a very limited amount of debt and the contractor had to remain very cash flow positive.If you can remember the old Smith safety system that was indoctrinated into us all the time. When it came to safety one rule stood foremost among the others. "Leave yourself an out" which could from an economic perspective be accomplished easily when you had little debt and were cash flow positive Unfortunately the ongoing conversion from IC to ISP is going to take that freedom away from a lot of people leaving even more at the mercy of FXG and by the time they discover what they have lost it will be too late.
Do the Trump thing. Bankruptcy.
No financing??
In the past two months I was approached by a banker at a large institutional bank telling me that they loaned on FedEx contracts. Also I was sent an email from 5 star (or whoever they merged with) saying that they now do route lending.
Many options are out there for the right individuals.
In the past two months I was approached by a banker at a large institutional bank telling me that they loaned on FedEx contracts. Also I was sent an email from 5 star (or whoever they merged with) saying that they now do route lending.
Many options are out there for the right individuals.
I'll pass it on next time I hear from someone who can't get financing. I'm out of this and I feel sorry for the prople who in the end will be enslaved to their own indebtedness which is exactlly what X wants. Fewer contractors, heavy debt no liguidity and no way out.
