This must be the most common question I get and it always baffles me. I usually assume that after writing so many posts on Business
Credit and Shelf Corporations that these questions will not be asked again but I realized that I need to be direct in what I am writing and answer specific questions because nothing should be left unsaid.
Do Shelf Corporations Work?
The quick answer to this is” Sometimes”. I know this is not the answer that anyone wants to hear but I will go into detail now. When people usually ask if Shelf Corporations work, it is a result of seeing advertisements and reading about various programs offered out there on the internet. Now we need to clearly say what we mean by Shelf Corporations “working”. I will go into what shelf corporations can and cannot do in a second. First, if you do not clearly understand what a shelf corporation is you should read the following articles:
Things that Shelf Corporations Cannot do…
The next few points are simply points that I have scene in advertisements for Shelf Corporations.
- A shelf corporation will NOT get you $100,000 or any more than that within 30 days without using good personal credit. Building business credit takes time.
- A Shelf Corporation will NOT get you a Commercial Mortgage without using your personal credit.
- A Shelf Corporation does not replace your personal credit but it can help.
Situations Where Shelf Corporations Do Work…
- A Shelf Corporation does make it easier to build business credit. The Tier 1 and Tier 2 companies approve you easier because they see an older company as having less risk.
- A Shelf Corporation can get you cash credit without any personal guarantee over time. It usually takes about 3 months to start getting cash credit.
- A Shelf Corporation can be used to lease vehicles. Once the credit is built up and is strong, you can get no PG financing for vehicles.
The buttom line is this… A Shelf Corporation is not an instant solution to getting credit but, if you are serious about acquired business credit with no personal credit, it is necessary. When building business credit many of the initial companies like Staples and Office depot require an aged corporate entity.