Introducing MAF’s newest program: LLC Loan Program
Meet the community where they are. At MAF, this is one of our core values. We’re constantly searching for ways to build new programs that uplift this principle. That’s why we are excited to launch our LLC Loan program: a program that will offer zero-interest credit-building loans to help individuals cover the cost of formalizing their business as a Limited Liability Company (LLC) in the state of California.
What inspired us?
Over the years, we’ve collected incredibly insightful data from our community — insights that have enabled us to think innovatively and critically about how we can continue to support the financial security of low-income and immigrant communities in a tough political environment.
2018 marked a decade of offering the Lending Circles program across the United States. Last December, our R&D Lab released a document with 10 findings or takeaways from our 10 years serving our community. During that time, over 30% of all of our clients report themselves as self-employed, small business owners, or contractors — with an almost perfect repayment rate. To date, we have funded over 11,000 loans, meaning that we have supported thousands of entrepreneurs across the US by helping them build credit to have access to better financial products, or by providing capital to start or grow their businesses.
Why LLCs?
We built an LLC loan program because we believe that the LLC business structure offers a flexible, safe, and accessible way to formalize and build a business. Since LLCs can be registered with a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN), this business structure is accessible to a wider range of communities. The biggest benefits to being an LLC owner are a) personal liability protection and b) personal privacy protection. This means that in the case of a business emergency, personal assets not directly associated with the LLC — like your home, car, and personal bank accounts — can’t be used to collect business debts or obligations. It also helps protect individual privacy, as LLC owners don’t have to share personal ITIN or SSN with vendors. At the same time, registering an LLC can be a good option for individuals looking to take advantage of the tax benefits it offers and add prestige and professionalism to their practice.
How does the program work?
Individuals looking to formalize their business in California can take out a zero-interest loan to cover the $800 Minimum Franchise Tax that the State of California requires all LLCs to pay soon after the LLC is registered. The loan will be paid back in ten monthly installments of $80, and reported to all three credit bureaus so participants can also build their credit history. The process and requirements to apply for the loan are very simple and easy to follow. To learn more about the program and submit your application, please visit our website.
Once you have completed all requirements and the application has been reviewed and approved, we’ll mail you a check for the $800 payable to Franchise Tax Board.
What does it mean to support entrepreneurs?
We know that starting a business can be overwhelming and in many cases it requires learning new skills and processes. Along with providing accessible and safe funding, we want to continue to build resources that our communities can use throughout their entrepreneurial journeys. Over the past year, we’ve partnered with experts in the field to develop a self-employment webinar series. Some of the topics covered include how to navigate the gig economy and how to set up your LLC. (Check out the full series here)
Whether you have a business idea or are thinking about formalizing your practice, we encourage you to visit our LLC Loan page where you’ll be able to submit your application for the loan and access additional financial education resources. As always, feel free to email us.
