The pros and cons of acquiring a shelf corporation

Many of us know that buying shelf corporations will help any start-up with credit. Those who do not know will get to know some of the advantages through the blog. Apart from the age, there are many other elements, which add to the creditworthiness. Businessmen and women should understand that although age plays an important role, it is not the only factor when acquiring credit. Many start-ups, as well as old businesses, consider shelf corps on sale for different reasons. But one should keep certain things in mind before opting for these corporations. Most of the time, people question us why they should purchase shelf companies. With these firms, you can soon engage in business without going through the hassle of establishing a new company. When firms start to engage in buying and selling, only a few vendors extend credit to these companies, whereas most of them would prefer two years of business. If the business fails to meet the time criteria, then they require a personal guarantee.

How do these companies help businesses?

A shelf corp can increase the credit opportunity available to your business. When it comes to buying shelf corporations, make sure it is at least 3 to 10 years old. Companies that are in business for two years or less can get credit, but they have limited avenues through which to avail such lines of credit. Those who want to start a new venture or set up another corporation can opt for this option.

What are the advantages of buying an aged shelf company?

Some of the advantages of buying such a company are:

1. It helps to save time and money to start a new corporation.

2. It helps to get instant access to government contract bidding. The majority of the states require a company to stay in business for a particular amount of time.

3. Easier access to credit and banking relationships.

What to keep in mind when buying a shelf corporation?

Nowadays, banks look at various things apart from the age when giving a loan, such as credit history, bank ratings, NSF history, etc. Try to avoid buying a corporation that has already done business in the past, as this will make you liable for all their past liabilities.

If one takes proper due diligence, then shelf corps can be a great option. Before committing to the purchase, make sure to get some research done.