Starting a New Business After Bankruptcy
Starting a new business after bankruptcy is possible, and certain considerations can help you succeed. At the Bankruptcy Center of Illinois we assist people with a bankruptcy in their recent past. Our DuPage County lawyers can help you assess the proper business form, set forth a strong financial plan for the new business, and assess risks when starting a business similar to the previous. As dedicated bankruptcy attorneys helping small businesses, we understand the challenges faced by clients considering a new business after a successful bankruptcy filing.Starting a New Business After Bankruptcy
Financing can present particular issues to business owners who are considering starting a new venture after successfully completing a bankruptcy case. It may be in the best interest of the business owner to separate their personal finances from business finances. Keeping personal finances separate from business is essential.
Creditors often expect individuals in the company to remain financially accountable for debt. This is the case even when business entities are intended to remain accountable for the debt. Selecting the appropriate business form, whether a limited liability company or a corporation, can help to protect individuals more than a partnership or sole proprietorship.Anticipate and Prepare for Financing Challenges
After bankruptcy, you may find that you lack the personal capital to invest in your new business. Your credit may be affected, making it more challenging to persuade financial institutions to finance your new venture. Banks and lenders will inquire into your personal credit history. They intend to finance those businesses that are likely to succeed. Approval is more likely if you take certain steps. For example, if you plan to have a business partner, it is advisable to make sure their credit is strong to offset your own issues.
A strong business plan, heavy on details, can help investors understand how you intend the business to be more successful. It can also increase your approval by soliciting investors to fund your business. Finally, consider investigating if local communities offer special grants or financing to new businesses.
The Small Business Administration (SBA) of the federal government can also offer financial assistance. In many cases, there may be a required personal guarantee. The SBA may also require business owners to provide a substantial asset to secure the loan such as a residence.
Certain types of businesses require less capital investment. Service oriented businesses may not need as much capital to operate. It is also possible to subcontract for an established business in order to limit your own operating capital needs. There are various independent contractor opportunities for individuals interested in that type of economy.Tax Considerations After Starting a New Business After Bankruptcy
Generally, a business owner is personally responsible for taxes associated with a business. It is important to stay on top of both business and trust fund tax debt. Businesses collect trust fund taxes and then submit payments. It is also necessary to receive new tax identification numbers, different from the numbers of the previous business.
Keeping diligent records is critical to a successful new business. Performance review can help to improve financing options in the future, if the business is successful. When lenders and other investors are given information, it can help them appreciate that the business is a solid investment. Often, loans are short-term but can be renewed. By providing accurate figures you can demonstrate that your business is likely to succeed.DuPage County Bankruptcy Lawyers for New Business Owners
At the Bankruptcy Center of Illinois, we understand that structuring a business to thrive is essential. If you are starting a new business after bankruptcy, our DuPage County attorneys provide advice and counseling. We are proud to help clients throughout Illinois, including the localities of Cook County and DuPage County. Call our office at (773) 993-0024 to learn more, or reach us through our online form.