More Small Employers Choosing Business Partnerships and S-Corps Over Sole Proprietorships, Study Shows

As business owners pivot to alternate legal business structures, new challenges, such as finding the right business partners, emerge.

Small Business Partnerships

Leading invoice factoring company Viva Capital says more small businesses are taking advantage of the freedom and protections afforded to S-corporations and partnerships but are left with a new challenge: finding the right business partners. Entrepreneurs exploring their options are encouraged to read, "How to Select the Right Partners for Your Business," a detailed guide that is now available on VivaCF.net.

The release comes on the heels of the U.S. Small Business Administration's latest "Frequently Asked Questions About Small Business," which periodically provides insights into small business statistics. Whereas 14.4 percent of small employer firms filed as sole proprietors per the 2017 release, the latest shows just 13.7 percent chose the legal structure. The loss represents more than 40,000 businesses changing gears. Modest gains were seen in partnerships. The percentage of employer firms filing as S-corps climbed by nearly five points in the reporting period as well. 

"Non-employer firms aren't seeing the same trend away from sole proprietorship, likely because the freelance industry is booming and freelancers typically operate under their own name," says Viva Director of Business Development Armando Armendariz. "But, once small businesses start adding in employees, they're choosing alternatives to sole proprietorships more than ever before."

Forming a partnership or corporation limits a business owner's personal liability compared to a sole proprietorship, which Armendariz says is a major driving force behind the trend. However, entrepreneurs also benefit from differences in how they're taxed and funded too. 

Viva works with many companies that are traditionally employer firms, such as manufacturing, staffing, healthcare, and oilfield services, that gravitate toward alternate structures, Armendariz expands. However, he notes that their clients who are service providers and those in the transportation industry are often non-employer firms.

"Business and marketing consultants, engineers, trucking owner/operators, and those in similar niches often file as sole proprietors by default," continues Armendariz. "They may see the benefit of having a partner, but they often work alone and don't have anyone they can tap in."

Armendariz says the latest Viva guide can help entrepreneurs in this situation uncover often overlooked and unexpected business partner sources. Those looking for a tailored funding solution are further encouraged to request a complimentary consultation at VivaCF.net.

ABOUT VIVA

Founded in 1999, Viva helps B2B businesses of all types accelerate cash flow through specialized funding solutions like factoring, accounts receivable financing, and asset-based lending. Their simple qualification process makes it easy for small and mid-sized companies to get vital funding despite lack of credit or time in business. Additional information is available at VivaCF.net.

PRESS CONTACT

Armando Armendariz
915-615-6664
factoring@vivacf.net

Source: Viva Capital Funding

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Categories: Small Business

Tags: business, business development, business partnerships, factoring company, invoice factoring, small business


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