Protecting Your Personal Assets

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“A few years ago, you took out a $300,000 loan for your business because you anticipated continued growth. But the economy soon fell apart, and so did your business. You can no longer pay back the loan, and the lender has filed a lawsuit against your company and you personally, threatening to seize your home, car, and cash in the bank.”

The above is an excerpt from Tom Taulli’s article on BusinessWeek.com.  The article, titled, “Five Ways to Protect Your Personal Assets” offers small business owners advice on keeping creditors from getting their hands on their personal property, should they default on a loan.

This information, of course, is very helpful and possibly essential today, as the recession has caused many businesses with existing loans to go under.  But a valuable piece of information that many small business owners may not know, is there is a way to get business cash without putting your personal assets at risk in the first place.

The merchant cash advance is not loan, but it is an excellent alternative to bank loans that allows small business owners to get up to $500,000 in unsecured business funds, meaning there is no collateral required.

In order to protect personal assets, Taulli advises small business owners to:

1. Inventory everything.
2. Research exemptions and protective entities.
3. Avoid personal guarantees.
4. Be wary of the contracts they sign.
5. Buy insurance.

While these steps may be imperative for borrowers of bank small business loans, small business owners who take advantage of merchant cash advances already have their personal assets protected.  If a merchant’s business closes down due to natural means (fraud is not involved), his/her personal property will not be confiscated.

If you are interested in getting an unsecured merchant cash advance, get a free online quote from MRI now.