Originally Posted by Caneel
I worked business lending for years as an underwriter, analyst and a lender. A couple of thoughts -
Your husband's attitude is typical of many work-for-myself people. No one (in the general sense) wants to pay attention to the unpleasant stuff like cash flow, taxes, etc.
The chances of him getting a regular commercial loan are slim to none if he hasn't been able to show at least breakeven over the past few years.
An SBA loan will try him (and you) up personally far than credit card debt. The SBA will attached to any asset you jointly own. They will take 3rd, 4th, or higher position on mortgages, require assignment of any life insurance, secure CDs or stock, etc.
Any IRS issues are a cause for great concern. The IRS goes from mailing notices to seizing bank accounts in the blink of an eye. I have seen this happen on several occasions. Do you know why there is problem with the IRS?
I think you are at the point of an ultimatum. What is his line of work? Could he get a full-time job and do his business on the side? If so, maybe you could frame it as get a full-time job, pay of the debt and then revisit the self-employment idea.
It is really helpful to hear that it is fairly typical to avoid thinking about thinking about these kinds of details. Maybe there's something about the type of person required to start and run a business, a big picture, idea person that prevents thinking about the nitty gritty details. I'm a nitty gritty detail person with a strong math background, so it is had to imagine not thinking about that stuff.
The IRS problem seems to be fines for late filing of annual tax returns and late payment of payroll taxes. His accountant is looking into it, but I don't have very much confidence in her. She's either not very good, or she's trying to drop him as a client (he owes her money, too). Her work is good, but she's slow in getting things done.
I am not sure he could get a full time job given the economy right now, but I have asked him to get a part time job to supplement his income, but he refuses. He feels his time would be better spent focusing on the business.
Originally Posted by zebra15
I agree with caneel. The IRS is a huge red flag. you need to figure out what the deal is with the irs and clear that first and foremost before taking on any more debt, or considering any more debt.
Does DH have an accountant, an atty, a business planner? Those might be good people to get involved at this point.
** our library frequently runs sba seminars
He has an accountant, but not a business planner. There are agencies in the area that work with small businesses; we're one town over from a business school and they offer many free services for local businesses. The problem is, he doesn't think he needs them. The credit card debt is 'investment' in his eyes, not debt, and every business requires investment. Once the investment pays off and the business becomes profitable, he'll be able to pay off the cards (this is what he says). But I wonder if I demanded he see someone from that organization they could help him see the actual financial picture. He's not hearing it from me, no matter how clearly I try to present it.
Originally Posted by A&A
Why don't you have access to everything? That's a red flag right there, I think. Sit down with him and figure out just how in debt he really is. He may not even know.
I don't know if he is intentionally withholding information. He has an assistant who makes all sorts of mistakes. She mis-enters things into the computerized accounts, ignores things she doesn't know how to do, which means that he doesn't always know about unpaid bills and the account information available to him is inaccurate. He knows this, but keeps hoping she gets better. She's a good friend of mine and I am steering very clear of this aspect of the problem. He is also extremely confident that things are OK. He is so confident it is contagious and talking with him about it is almost hypnotizing. He presents this great story in a calming, relaxing voice, and for a few moments I believe it. (The IRS has been sending us letters, but S. is looking into it for us; the IRS has made mistakes before so S will work with them about it.) But then later I remember all the things he didn't mention and see all the holes in the story (The IRS hasn't made nearly as many mistakes as he has; he owes thousands to S, so she may not have much incentive to work on this quickly; the longer this goes unsettled the bigger the fines get). I've resorted to only communicating by email because then I have time to think about what he's said before responding, and can respond to the facts and not his reassuring nature.