Many people run their small business from home these days. However, to qualify for funding, a small business owner must pay attention to details like business address and phone service. That’s not just a mailing address for business cards, but for official business documents as well.
A home address is acceptable, but it won’t work for everyone. A virtual office for LLC address may be the next best option.
The problem is, there are times a lender will not accept a virtual address option, and if you need a registered agent, that could be a problem as well.
What are virtual addresses? How do virtual addresses for a business work? It may not be exactly how you think.
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How Does a Virtual Address for an LLC Work?
There are businesses that will sell you a virtual business address that you can use as your mailing address on official documents if you do not wish to use your physical location.
These addresses are tied to one central location that will accept your mail, and either forward it to you or allow you to pick it up.
When you use a virtual business address, you have access to a virtual mailbox. This is a real mailbox at a location other than the post office. Business owners using virtual addresses can receive mail and packages at this virtual mailbox.
There are benefits to using a virtual business address service like this. For example, these businesses may offer access to both virtual office space and maybe access to a meeting room.
As a result, it is possible to use this meeting space to avoid meeting with clients or customers in your home.
It may also be more secure to receive packages and documents at a virtual business address. There is usually someone there during the day, and some virtual address services have 24-hour security.
It’s also safer and more professional for business owners to have clients meet in this type of space. Even if it is a shared space in a virtual address office building, it’s still probably better than meeting them at your home.
Some virtual address services will offer phone answering and message services. If needed, you can have them take calls and messages for your small business and pass them on to you.
There are even some that will offer registered agent services. The need for a registered agent is often a sticking point, so if you need one be sure you choose a service provider with that option.
Downsides to Using a Virtual Office Address as Your Business Address
One big issue with using a virtual business address is that a corporation or a limited liability company will need a registered agent.
A registered agent is someone who is designated by the company to receive official papers for the company. They have to be at the business address ready to accept documents. These may include court papers, renewal notices, tax notices, and more.
A form must be submitted to the state in which you are doing business to register this person as your business agent. Thus the term “registered agent.”
While it’s fine to receive mail and packages at a virtual mailbox and to take advantage of mail forwarding services if they offer them, a virtual office service may not work well as a registered agent address. Though, some service providers do offer that option for an additional fee.
They have a person on site that can be designated by your company as a registered agent and may even help with the paperwork to do so. It’s important to note that if you need a registered agent, you will have to find the best virtual office company that provides this service. Not all do.
In addition, there can be multiple business addresses on the same site with a virtual office address.
Depending on how much mail you get there, including junk mail, you may find you need to chase down your business mail if it ends up in the wrong hands. It could also easily get mixed up in mail forwarding. This type of setup makes mistakes more likely.
When it comes to funding, we know of at least one credit provider that will not accept a virtual address. So, while in some cases the benefits outweigh the drawbacks, it is possible this type of mailing address could prevent you from getting funding in some cases.
How a Virtual Address Helps in Establishing Business Credit
Part of having business Fundability™ is having a physical address where you can receive mail. You cannot build business credit if your business does not have Fundability™.
It’s more than location and getting postal mail. The right address adds credibility and separation of the business from the owner. These are things that lenders and credit providers look for when it comes to extending credit.
While you can receive postal mail and packages at a local post office box or other similar addresses, it’s not enough. Just receiving mail doesn’t turn PO boxes into physical space. It’s got to be an actual physical address.
Some lenders and credit providers will disqualify you as soon as they see anything other than a real street address on an application.
If there is no brick-and-mortar business address and you do not wish to use your home address, a virtual business address is really the only other option business owners have.
How Do I Create a Virtual Office for My Business?
It’s as easy as finding a business that provides this service. The trick is finding the one that works best for your business. That means providing the services you need while still being affordable.
It’s important to note that this is different from using a virtual mailbox like Anytime Mailbox, Earth Class Mail, or Postscan Mail. While they do provide a business address and allow you to access your mail online, they do not seem to offer physical meeting spaces or other services.
In fact, often these addresses are P.O. Boxes, which do not work for Fundability™ purposes anyway.
Virtual Address Providers
Virtual office options will vary based on your location. You’ll have to choose a virtual business address provider based on what is available where you are.
Are you looking for office space for meeting with business contacts? Do you want the option of mail forwarding so you can receive mail at your home instead of having to make a trip to pick it up?
Here are four options for virtual office providers, though there are many out there. Do your own research to find out which ones will work best for your needs.
How Much Does a Virtual Office Address Cost?
The answer to this question is greatly dependent on a number of variables, the first being location. The second, as you might guess, is your specific virtual address needs.
For example, in comparing virtual address options and locations for the 3 companies above, we found that each has between 3 and 6 locations available in Memphis, TN. Among those, the cost for a virtual business address starts at around $45 per month.
After add-ons, such as a registered agent and conference room option, the cost of a virtual business address may go as high as $455 per month.
In Los Angeles, each of these virtual business address companies has over 40 virtual address options. Some of them have comparable starting prices, while others start much higher, like in the $200 per month range.
There is also a one-time setup fee that is between $150 and $200 for most, though there are occasional promotions where this is reduced or waived.
Your business address is important to Fundability™. Fundability™ is vital to building credit for your business.
A Fundable address is a physical address where you can receive mail. This means no P.O. Box or the like. If you have a physical office for your business that is not your home, great.
If you do not, a home address will work. But if you do not want to do that, a virtual office address may be the next best option.
It is important to note that we know of at least one credit provider that will not accept a virtual office address, but in some cases, the benefit of choosing to use a virtual business address is worth the cost.
The key, should you decide to go the virtual route with a business address, is to know what you need on the front end. Then, look for service providers that provide the services you need at a cost you can afford.
If you need a registered agent, be sure you can get that. If you need office space, make certain that is an option. Most importantly, ensure your business address is a physical address where you can receive mail.
Is a virtual office right for your LLC? That’s a decision only you as the business owner can make.
Also read: Sole Proprietor vs LLC vs S Corp
Your Business Address is Just One Part of Fundability
Now that you have your business address taken care of, let’s take a look at the rest of your Fundability Foundation™! Check out the Fundability Foundation Mini-Course to learn everything you need to set up a Fundable business 👉
