If you find yourself in a situation where you need to borrow from a payday loan company then perhaps it is time to pause and reflect upon how you got to this point. Sometimes situations arise that you have no power over but more often it is a fault of bad financial planning. Now would be a good time to review your monthly budget and try to see what went wrong and what you can do to prevent problem from occurring again.

Depending upon your situation, there may be better options for you than a payday loan. For example, if you have a little time to wait, you may be able to use funds in your 401K plan. Funds withdrawn from your 401K you are only taxed at 10% and if you make arrangements with your payroll department to repay withdrawal from your 401K then it is not taxable at all.

Before getting a payday loan make sure you have examined all of your options. Do you really need this loan? Is there a mistake on your credit report preventing you from getting a normal loan or credit card? Can you change your monthly budget to avoid financial problem you are experiencing? Payday loans may seem like a convenient option but a steep price comes with that convenience.

Let's assume that shell insiders have 3 million shares and buyer pays to take down these shares at an average price of US$4/share. The investor relations costs to create buying will be about US$750,000. At this point, reverse merger is still a good deal for buyer because they have spent a total of about US$950,000 against a registration cost of at least $1.7 million. They have saved US$750,000.

MANAGING THE FLOAT

The stock held by public is called "the float." As a general rule, float trades every quarter. If public can't sell their shares in any quarter, share price drops. If buying exceeds float, in any quarter, share price moves up. The three million shares of shell insider shares are now part of float. To hold US$4/share price, buyers must spend US$750,000 per quarter in investor relations' costs. In one year, their publicly traded shell will cost them US$3 million to buy shell insiders' shares and repeatedly find share buyers each quarter for resulting float. Almost always, investor relations' costs will eventually bankrupt public company. It's a downward spiral of high overhead, without offsetting income.

The reverse merger shell buyer seeking a fund or angel to do a Private Placement almost always fails. The potential investor should realize that public company will be spending more money on investor relations in year they must hold their shares than they will usually receive from their investment in public shell company. Logic and past experience correctly tells investor not to risk their money in Private Placement. The fact is less than 10% of investors in reverse merger private placements ever recover their risk capital.

A WISER PATH

If you are seeking a backdoor to becoming public in United States, it isn't buying a trading shell. Doing so is a trap that will leave your company with few options in two to three years. There is a far wiser path for CFO who understands dangers of Shell Trap. Learn it.

If you need help finding your way through backroads of public company process, you can email William Cate at: Beowulfinvestments@Earthlink.net

To contact author visit: [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]