<p>Pretty soon a Family friend is giving up on her landscape company and wants me to get owner ship and keep it active. she does not have enough time to manage the company. I am a freshman in a Public College as a full time student. </p>
<p>My questions is; is owning a small company/Business hurt me from getting financial aid? </p>
<p>Thank You.</p>
<p>Some more information will be needed to answer that question.
Is the company a corporation? How much income does your friend get from it? Does your college look only at FAFSA (since it’s public I’m guessing this is the case) or does it use CSS/Profile as well?</p>
<p>From my experience: we (parents) own a subchapter S corporation. Any income that the corporation makes (revenues minus expenses) gets reported to the IRS and we must include it on our personal income tax forms (1040s) and is reportable on both FAFSA and Profile.</p>
<p>However, a major difference between FAFSA and Profile is that FAFSA does not include the value of the business as an asset (for companies with fewer than 100 employees, which includes our company). I believe there is also a requirement regarding the percentage of ownership as well.
CSS/Profile schools may also want to know the value of the corporation as an asset, and may use that information in determining aid.</p>
<p>My guess is that a landscaping business probably doesn’t have a huge value as an asset unless it is quite large. If you are talking about a few used lawnmowers, a computer and a truck, its asset value may not be that much (?). I would guess the amount of income it produces will be of much more importance.</p>
<p>remember, the FAFSA is designed to punish families that work hard and contribute to the economy. the fact that your family owns a business (gasp shock!) is probably going to be a major strike against you both in the admissions process and in getting any amount of your own money back to you as financial “aid”. Your best bet is to make sure that your family’s business doesn’t have more than a 100 employees (if you have to downsize, so be it) and keep the material assets held by the company to a minimum (you might have to sell off some of your working capital and convert any money into a 529 plan to avoid having it assessed at a higher rate). you still could get screwed with regards to the CSS profile though, who dont automatically have any such protections available. c’est la vie…</p>
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puh-leeeeze…a form “punishes” hard workers?</p>
<p>Sorry that I do not have any relevant advice for the OP as our small business is parent-owned, but does not seem to have been unfairly assessed in the financial aid analysis.</p>