Johny Fernandez: Should I form an LLC to be a broker?
Sean Murray: Should you form an LLC to be a broker? So I don't know that it has
to be an LLC, per say. But if you're going to be a broker and a small
business finance industry, you should certainly organize your legal entity.
From the beginning, I think that there's a tendency for new entrants to think,
let me try it first. And if it's working out, well, then I'll do that. Yeah,
because it costs money to form an LLC, or form an S corp, or form a C Corp, or
whatever it is, someone's going to form. But you're kind of you're kind of
setting yourself up for some level, some level of failure, if you're not willing
to commit that much. Because forming it like an LLC, you know, it might cost you
a couple 100 bucks to do it, right, you're probably going to need a bank
account in that name, you're probably gonna need like a tax ID to go along
with it. But all those things, kind of prepare yourself mentally, that this is
the commitment to move forward and by taking those steps, you're really truly
saying, this is something I'm going to try. I'm investing in it to some extent.
And if you don't do those things, you're kind of giving yourself an out. But
yeah, well, you know, what did I What did I really put into it? You know what
I mean? Yeah, that type of thing. But the flip side of that question is,
should you form an LLC, and it doesn't have to be an LLC, per se, I'm not, you
know, I'm not an accountant or a lawyer. But um, you should really think about
forming an entity for the purpose of legal liability, because one thing we
have talked about on here is that if you are a broker in the commercial finance
world, no matter what, no matter what anyone has told you, about being a
broker and how easy it is and work from home and all this other stuff. Yeah. You
know, there there are certain situations that arise that will make you feel as if
you really are in commercial finance. And you could end up in like a lawsuit,
you could end up meeting a lawyer and and you never know what could happen.
You could be in a contract dispute with a funding company, you could have a
merchant that was unhappy with, you know that what what happened with the funder
and they're blaming you and you're an independent sole proprietor, you're kind
of making yourself legally liable individually, and you'll want to avoid
that. So I would say you should definitely form some type of entity for
a variety of different different reasons. One is to protect yourself
legally, and to prepare yourself mentally. That this is something you're
truly interested in pursuing.