We are pleased to offer this exceptional program for those existing companies wishing to:
- Borrow at below market rates;
- Repay loan principal (as well as interest) with before-tax dollars. Normally, principal must be repaid with after-tax dollars meaning that a 40% tax bracket corporation must earn about $1.70 to repay every $1.00 in loan principal. With our program, principal payments are made dollar for dollar. Just think what that can do for your bottom line;
- Retire and/or sell your company to others and enjoy your profits devoid of capital gains tax consequences;
- Sell up to 99% of your company and still maintain control;
- Possibly recapture your last 3 years corporate IRS tax payments;
- Create a market for inside and/or outside shareholders in closely held companies;
- Reward employees with a benefit tied to corporate performance while affording the company substantial tax benefits;
- Increase profits;
- Increase employee loyalty, reduce absenteeism, improve employee morale;
- And more… much, much more.
Example – A client had entered into a buy/sell agreement to acquire a certain Ohio Corporation for $8.0 million. We told our client to find out how much the seller would have left after paying his capital gains taxes. The answer was $6.5 million. We advised our client to offer the seller $7.0 million tax-free and the transaction was consummated accordingly. The seller was thrilled because he received $500,000 more than originally anticipated. Our client was ecstatic because he bought the business for $1.0 million less than originally agreed. And, the frosting on the cake was that we were able to recapture the corporation’s last 3 years IRS tax payments totaling about $300,000, i.e., the net cost to our client for the $8.0 million company was only $6.7 million. He is now repaying his loan interest, and principal, with before-tax dollars, and it was a win-win situation all around.
How to Qualify
Companies should be profitable with gross annual sales of $ 8 – $10 million or more with an EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of at least 8%. In addition, they should have a minimum of 10 employees, preferably non-union.
No two programs are the same and will be tailored to suit individual conditions and preferences. There will be some costs connected with the setup but they will be recaptured upon funding. Costs can range $50,000 to $75,000 and up depending on the program’s complexity, which are usually recaptured upon funding.