Free Financial Advice

There is likely a canned answer for this, but I couldn’t seem to find anything. I am starting a S-Corp in Saint Paul, MN. We are looking at buying a duplex to rent out (the particulars of the purchase are taken care of, and getting started does not look to be a problem right now). As it is, I am looking at putting 30,000 into starting this business (which will cover 25% of the purchase price of the property plus operating expenses to get started). This will not be my full time job, but a side business, as I have property managers all lined up.

The question is, does anyone know of business grants that I can look into? I know money does not grow on trees, but I have heard of some small businesses getting grants. We’re actually looking at purchasing vacant homes (which I think is good for the city), though I imagine if grants did exist for this kind of venture, they would be swooped up pretty quickly.

Does anyone have advice on where I can look to find said grants? Who to typically contact with the city?

I work at an SBA and we always tell people no. Unless you are disabled, a minority, a veteran, then its not worth your time looking for one. You can look into your city’s chamber of commerce on the off chance there is but don’t count on it. Instead, create a solid business plan and apply for a loan.

I’m going to join an already established LLC owned by a friend and a partner. How does liability for an LLC work? If I own 5% of the LLC what is my personal responsibility (tax and otherwise) if the company makes say $1k. What about if the company ends up owing $1k? The LLC is based in New York, but I live in Pennsylvania, does this complicate things and if so how? Also, the eventual goal is to get venture funding. How difficult is it to move to a C-corp? What about an S-corp? (What’s the difference? I didn’t really understand a difference from reading Wikipedia)

With an LLC, the company doesn’t actually make any money (tax-wise). Instead, the income that the company makes flows through to you. For example, if your company makes $1k and you have a 5% share, you add $50 to your tax return and to your tax return only. Losses flow through the same way, basically.

As for company debts, you’re not personally liable for them.

I’m not sure about venture funding, but generally, S-Corps are better than C-Corps. The difference between them is that you’ll generally get double taxed with a C-Corp (company pays tax on its income, then you pay tax on what you receive from the company), while S-Corps have the same flow through as LLCs.

Restrictions on S-Corps include:

-shareholder limit (~100, depends on state laws I think)
-can’t be owned by corporations, partnerships and trusts, only individuals and estates