When Clearco launched Invoice Funding in Fall 2022, we made the strategic decision to focus exclusively on the U.S. market. Our goal was to create a best-in-class funding experience for U.S.-based ecommerce businesses before expanding back into international markets. However, there are some key exceptions, and if your business qualifies, Clearco may still be able to fund your working capital needs even if you are located outside the U.S.

What Is a Corporation?

A corporation is a legal entity that is separate from its owners but has many of the same rights and responsibilities as an individual. When starting a business, founders can choose to incorporate, run it as a sole proprietorship, or form an LLC. There are also other business structures, but these tend to be the most common. Each structure has its own benefits, but incorporation offers specific advantages, particularly around liability protection.

One of the key benefits of incorporating versus other business structures is that the owners have limited liability. Put simply, corporate structures help protect the private assets of owners and investors in the business. There are also other advantages to incorporating, such as tax benefits, that corporations often receive, depending on where they are incorporated.

Types of 🇺🇲 Corporate Structures

In the U.S., two of the most common corporate structures are S corporations (S Corps) and C corporations (C Corps).

1️⃣ S Corps: S corporations are generally smaller businesses that combine the benefits of incorporation with some of the tax advantages of an LLC. However, S Corps are limited to 100 shareholders, can only issue one type of stock, and are restricted to certain shareholders (such as U.S. citizens or residents).

2️⃣ C Corps: C corporations, on the other hand, have fewer limitations and are better suited for businesses looking to raise external capital. While more complex to establish, C Corps can have unlimited shareholders and multiple types of stock. This structure is often preferred by startups and large businesses like Apple and Coca-Cola.

How to Set Up a 🇺🇲 Corporation

To establish a U.S. corporation, founders need to apply for an Employer Identification Number (EIN) through the IRS website. This EIN allows the business to apply for licenses, register with state agencies, and open a business bank account. Once the EIN and bank account are set up, the business can begin operations, including product shipments, creating a website, and marketing to generate sales.

🗒️ Note: Clearco requires an EIN to fund ecommerce businesses.

Why Founders Should Incorporate Their Ecommerce Business

Many ecommerce founders have the goal of scaling their business, hiring additional people, and perhaps one day exiting with a sale when they decide to retire. All of these things are made simpler by incorporating, because of the benefits of limited liability, the ability to extend the life of the corporation beyond that of the founder, and easier access to grants, investors, and other types of financing.

Does Clearco Fund 🇺🇲 Corporations?

Yes! Clearco’s Invoice Funding product is specifically designed for U.S.-based ecommerce businesses. As long as your business meets our requirements, we can provide the working capital you need to scale.

Does Clearco Fund Non-🇺🇲 Corporations?

Currently, Clearco focuses on providing efficient and productive working capital solutions for U.S. businesses. While we aim to expand internationally in the future, for now, we only fund businesses whose principal place of business and incorporation is within the U.S.

However, if your business is an international company with a U.S.-based subsidiary that meets our requirements, we may still be able to provide funding.

If your business meets these criteria, contact us today to learn more about Clearco’s Invoice Funding and how we can support your growth.