Tips & Traps From Ron’s Book, Getting To Yes With Your Banker
Tip No. 19 -Choose the Legal Entity to Maximize Tax Benefits and Minimize Costs
Make sure you get legal and tax advice on this one, but one tactic I used was to place real estate title in a single member LLC. I was doing a 1031 tax deferred transaction, but I believe you can do this in most any case. It must be a single member LLC, however. You can then sell or convey the entity to another party without getting a new title policy, as the title policy belongs to the entity. If you put it in your name personally, the coverage is lost when the property is conveyed.
Tip No. 20 – Use the 10 Percent Rule
Most lenders won’t tell you unless you ask. But they have a 10 percent rule. This is fairly simple, most banks can loan you 10 percent of what you already owe without a formal approval process. Now don’t misunderstand me, the loan still has to be underwritten and viable and all the fundamentals in place, but using this can save time, and in some cases money. You, of course, must be in good standing, and have a good relationship with the officer. An example? You have a $100,000 line of credit, and a $350,000 real estate loan, and $100,000 in truck loans, so total debt is $550,000. If your need is reasonable, you can usually get your line of credit raised by up to $55,000 without a formal request process. This is subject to your loan officer’s authority of course and subject to the legal lending limit of the bank, among other things, but don’t be afraid to ask.
As important as the information in this book may be, it’s only part of a much bigger picture. Success as a businessperson — regardless of field — depends on many components and learning how all the moving parts fit together can make the difference between success and failure. You won’t find many tips, traps or secrets highlighted in this chapter, as this chapter is almost completely advice which includes all of those.
Although Ron and Greg have similar values, their backgrounds couldn’t be more dissimilar. Greg has a BBA from Southern Methodist University and holds an MBA from Texas Christian University; Ron found himself living on his own as a teenager after his father’s death and is largely self-educated. As different as these two men are, both have earned success in their fields through hard work, a laser-sharp focus on their goals and the desire to constantly improve their skills and knowledge.
Their approaches are as different as their backgrounds, but both have plenty to say about building a successful business.
Remember only you can make business great!
Ron Sturgeon, founder of Mr. Mission Possible small business consulting, combines over 35 years of entrepreneurship with an extensive resume in consulting, speaking, and business writing, with 6 books published. A business owner since age 17, Ron sold his chain of salvage yards to Ford Motor Company in 1999, and his innovations in database-driven direct marketing have been profiled in Inc. Magazine. After the repurchase of Greenleaf Auto Recyclers from Ford and sale to Schnitzer Industries, Ron is now owner of the DFW Elite Auto suite of businesses and a successful real estate investor.
As a consultant and peer benchmarking leader, Ron shares his expertise in strategic planning, capitalization, compensation, growing market share, and more in his signature plain-spoken style, providing field-proven, high-profit best practices well ahead of the business news curve.
Ron is a web expert, but he is also an expert in helping all types of small businesses become more successful and more profitable. He has helped owners in industries from restaurants to law firms with a wide variety of business issues, including sales, promotion, production, financial measures, business strategy, and planning for startups. Whatever your unique challenges, Ron can help you.
To inquire about peer benchmarking, consultations, or keynote speaking, contact Ron by calling 817-834-3625, by emailing rons@MrMissionPossible.com, by mailing 5940 Eden, Haltom City, TX 76117, or online at Mr. Mission Possible.