Is it time to speak with Brent? Click HERE to schedule something.

Part 5 — The Tax Strategy Liquidity Gap

Your CPA Found the Strategy. Where Should the Cash Come From?

Your CPA identifies a legitimate tax strategy that makes sense for your business. Great.

Then comes the next question: Where should the cash come from to execute it?

Some tax strategies require significant capital. You may have the money sitting in your business account, but using it could mean giving up cash you need for payroll, reserves, expansion, or the next opportunity.

So before writing the check, I think business owners should ask:

Is there a smarter source of liquidity?

Your Home Equity May Be Part of the Answer

If you’ve owned real estate for the past several years, you may have built significant equity.

A HELOC can potentially provide access to some of that equity without replacing your existing first mortgage.

That creates another option:

Instead of automatically pulling a large amount of cash from your business, we can compare the cost of accessing home equity against the value of keeping that cash available.

And for self-employed homeowners, there’s an important additional solution.

If legitimate tax write-offs have reduced the income showing on your tax returns, a Bank Statement HELOC may allow qualified borrowers to use eligible bank deposits to document income instead.

It’s another example of solving The Business Owner Mortgage Problem.

The Strategy Still Has to Make Financial Sense

Having access to equity doesn’t mean you should use it.

Before I would recommend doing so, I want to answer four questions:

What does the strategy require?

How much capital do you actually need?

What does the financing cost?

Interest, fees, and repayment all matter.

What is the value of keeping cash in the business?

Liquidity has value too.

What is the repayment plan?

We don’t want a short-term strategy creating long-term debt.

Then we compare the numbers.

Math decides.

If accessing equity strengthens the overall strategy, it may deserve consideration.

If it doesn’t, leave the equity alone.

Your CPA Handles the Tax Strategy. We Help With the Financing Strategy.

This is where I believe good financial professionals should work together.

Your CPA or tax advisor determines whether a tax strategy makes sense for you.

My role is to help determine the most efficient way to finance it without unnecessarily disrupting the rest of your financial picture.

And sometimes, the equity you’ve already built through real estate can become part of that solution.

If your CPA has recommended a strategy that requires significant capital, bring me into the conversation before you start moving money.

We’ll evaluate the financing options together and determine whether your home equity belongs anywhere in the plan.

Because the objective isn’t simply accessing money.

It’s using your mortgage and real estate strategically to help you save or make more money, grow wealth, and retire well.

As always, tax strategies and the tax treatment of borrowed funds should be reviewed with your CPA or qualified tax professional.

The next step is figuring out whether using any of it actually makes sense.

Is it time to speak with Brent? Click HERE to schedule something.

Past Articles in the Series can be accessed Below:

Part 1 of the Business Owner Mortgage Problem

Part 2, Part 3, Part 4

To your success,

Brent Willis

Branch Leader

NEO Home Loans

www.GoDreamLender.com