Michael Wedaa  - Augmentus Business Solutions

On the Keeping the Details Correct: "If your address is your old business address with the Secretary of State or with the IRS or on one of the credit bureaus, there's an algorithm in a lot of banks that will give you an automatic denial."

Money makes the world go 'round, and it does that by flowing.  Money in your business, money out to employees, vendors, investments, and the ever present tax-man.

But what if you could shuffle your money a bit to be able to improve the flow to the good things to build your business and your net worth and reduced the amount going to the less than good things?  Would you want to learn how to reduce your tax burden, limit your liability and build your business credit??

The crazy thing is, a lot of these strategies are simple and effective.  The crazier thing is that many entrepreneurs don't know about them or feel they are too small for it to matter.

It matters.

Michael Wedaa is the owner of Augmentus Business Solutions.  Their purpose is to help businesses navigate the game of business to make and keep more money.  He understands the nuances and differences between things like LLCs, S-Corps, C-Corps, and how you want your different business entities to be structured.

Listen as Michael goes into detail on business credit, taxes and business entity differences.

Enjoy!

Visit Michael at: https://www.augmentusinc.com

On Instagram: https://www.instagram.com/corp_llc_guru/

 

Podcast Overview:

00:00 Understanding Business Credit Types

07:23 "Ensuring Business Credit Readiness"

12:22 Boost Business Credit with Proper Address

18:05 Kid-Friendly Jobs and Saving Tips

22:51 Passive Income through Market Rent Strategy

31:32 Protecting Assets with Equity Liens

36:55 Strategic Lien Planning Explained

41:22 Real Estate Investing with Business Credit

46:18 Delaware Business Court Advantage

48:50 "Registered Agent Requirement for Businesses"

59:11 Asset Protection Through Liens

01:04:44 "Business Rogue: Advanced Corporation Hacks"

Podcast Transcription:

Michael Wedaa [00:00:00]:

No, but, you know, business credit is what I wanted to talk about today. As you know, we focus on helping people get the most out of their corporation or llc. And one of the ways we help people do that is by helping them build business credit. And business credit is very different from personal credit. The rules are different.

James Kademan [00:00:25]:

You have found Authentic Business Adventures, the business program that brings you the struggle stories and and triumphant successes of business owners across the land. Downloadable audio episodes can be found in the podcast link [email protected] we are locally underwritten by the bank of Sun Prairie Calls On Call, Extraordinary Answering Service, as well as the Bold Business book. And today we're welcoming Slash, preparing to learn from Michael Wedaa of Augmentus Business Solutions. And Michael, we're hitting a lot of things here. The business credit, I believe, is the main one. So let's just start out with what is business credit?

Michael Wedaa [00:01:01]:

Great. No, first off, James, it's great to spend some time with you again. It's been a while since we last.

James Kademan [00:01:06]:

Chatted, but it has, you know, it's funny. I'll just elude here a little bit. YouTube is moving into shorts and all that jazz because they're trying to compete with all the other social media things that have short videos. And so we just got fancy software, whatever to find shorts. And it's interesting because some interviews, you're like, yeah, there's a handful. And yours is like, ba, bam, bam, bam, bam, bam, bam, bam. All good stuff. So I'm so happy that we have you on here a second time because, well, good.

James Kademan [00:01:34]:

Now we get more content for the masses.

Michael Wedaa [00:01:36]:

Right? That's right. That's right. No, but, you know, business credit is what I wanted to talk about today. As you know, we focus on helping people get the most out of their corporation or llc. And one of the ways we help people do that is, is by helping them build business credit. And business credit is very different from personal credit. The rules are different. The way you build it is different.

Michael Wedaa [00:01:59]:

And, you know, you asked me what is business credit? And business credit is credit that is tied to the ein of a business that comes in two forms, personally guaranteed and non personally guaranteed. The personally guaranteed credit is where you would put your Social Security up, Social Security number up as a business owner. And what you're doing is you're guaranteeing that debt so that the business can't pay it, then it transfers over to you as an individual. And it makes the banks feel good that they have that second route of recourse, really. And then the non personally guaranteed stuff. If you can get your business credit score up high enough and get your profile looking good enough, there are banks that will give you credit lines without being tied to a to your social. So what's great about that is that if you have trouble with your business and you need to shut it down and bankrupt the company, all they can do is take the assets in the business. So it's important to know when people are applying for business credit, what's personally guaranteed and what's not.

Michael Wedaa [00:03:00]:

And really the best way to say it is that in most cases, if it's a major signature bank like a Chase or a Wells Fargo or a Bank of America, nine times out of 10 it's going to be a personally guaranteed account. If you're going for a credit card, right? And people, that's not a bad thing. You know it, all it does is it shows an inquiry on your credit. But if I got a $25,000 credit line tomorrow from let's say Chase, all it would show is an inquiry. My personal credit, it wouldn't show that I got my business, got awarded that $25,000 credit line. And if I maxed it out tomorrow, it would only show on my business credit profile, not on the personal credit profile. Because it's simply a personally guaranteed personal guarantee. It doesn't show up active account on the personal credit.

James Kademan [00:03:49]:

Oh, interesting. So you do your Experian or whatever they are, you wouldn't see that card listed as either available credit or debt that you have there.

Michael Wedaa [00:04:02]:

Yes, because you know if you max out a card on the personal side, you get dinged in a big way. Score tanks. Right. So that's what's great, is that the only way your credit gets dinged is through that initial inquiry and then if you default on the debt, it will then report on your personal credit score. But if you're just maintaining the debt and it's fine, only one thing you're going to see is that inquiry. Everything else will remain incognito on the business profile.

James Kademan [00:04:27]:

Interesting. So the credit bureaus, right? There's three of them, is that right?

Michael Wedaa [00:04:32]:

Yep, that's right.

James Kademan [00:04:33]:

Experian's one that's top of mind. But I'm sure there's another two. I can't think of their names.

Michael Wedaa [00:04:37]:

Yeah, there's Equifax, TransUnion.

James Kademan [00:04:40]:

There we go.

Michael Wedaa [00:04:41]:

Yes, there you go.

James Kademan [00:04:42]:

Those are the three from the business side. Is it still those three companies or are there different companies?

Michael Wedaa [00:04:47]:

There's two that are the same. There's Dun and Bradstreet, that's the biggest one. And then there's Business Experian and Business Equifax. Those are the three big ones. And then there's, you know, they dig into LexisNexis a little bit and a few other smaller ones. But the big three are Dun and Bradstreet, Business Experian and Business Equifax.

James Kademan [00:05:05]:

All right, So I remember way back when we're talking mid 2000s, I had opened up my first business and Dun and Bradstreet sent me a letter saying, hey, if you want business credit, you have to pay us a nut or a monthly nut or something like that. And I was just a small little, I don't know if I had two employees, something like that. It was one of those things where I'm like, why would I pay you to have business credit? I don't need any business credit. Is that still a thing? And if it is a thing, tell us about that thing.

Michael Wedaa [00:05:36]:

Yeah, it is a thing. So here, you don't need to pay Dun and Bradstreet, even though they will tell you that you need to. You can call them and ask them, say, I need to get a free DUNS number for verification purposes only. That's the keywords. And they are going to go, oh, we don't know what you talked about, or no, you needed this or it's not going to do any good. The person on the phone gets a commission for marketing their monthly plan, their annual plan, right? And so they're going to tell you, they're going to fight you tooth and nail to say, you need to pay, you know, this $50 a month or you need to pay $250 for the access for the year. And you just hold fast and say, nope, I need it for verification purposes only. I'm not using it for anything else.

Michael Wedaa [00:06:14]:

And eventually they'll capitulate and give you your DUNS number. And there is, there's some free services. We can go in there and actually enter your information, your company information into. You build out your own report. James, that's one of the biggest differences with personal credit from business credit is that you have to go set up your business credit where on the personal side you go get a card and it also gets set up automatically. You don't have to go in there and physically do it. So one of the key differences is that, but yes, Dun and Bradstreet go get your Duns number, get it for free, don't pay for it. The only time you want to pay for it is once you've gotten a few credit lines,