Finance Roll

Many Americans today want to start their own business and do their part in strengthening the US Economy. The challenge usually is not Desire but Financing. Banks are very restrictive on their lending today. Even if you get a loan from a Bank it may not be enough funds. I have spoken to many people about new businesses and asked, why not use your 401K funds? Most did not  know that using 401K funds for themselves would be an option.

Yes you can use your 401K plan to invest in your own business without incurring taxes, penalties and Interest. The money can be in your hands in as quick as 3-4 weeks, using the right companies and plans.

I often ask, why invest in other companies when you can invest in yourself. There are many who have been laid off, downsized, or given a severance. Use your severance and your 401K roll over for a small business start up or franchise.  You could even use this found money as a salary until you get your new business or franchise off the ground. This type of financing, is creative, easy to use and provides you the security you may be looking for.

Using Retirement funds as a valid method of funding a business is valid, as long as you know how to do it, follow IRS guidelines and properly administer the plan. Compliance is the key, and you should not just jump into this alone. The best thing to do is have a basic understanding of how the conversion of your 401K funds into usable cash happens, and then let an expert handle the rest.

The basics are; you take your 401K funds and roll them over into your New companies plan. Your new company retirement plan invests in your business and in return receives stock. You now have a new customized retirement plan to help you build a successful business and protection on your new wealth. Your plan can be used with a SBA Loan as well. This is safe and proven, and I believe needs to be used more today! Pre Tax dollars can now be used to fund your new business venture. You can set aside tax deductible savings up to $200,000 per year, using this type of plan. Your new business can gain equity and value quicker and you have more safety.

There are companies that specialize in this type of 401K conversions and I have my favorite. There are some fees that you will incur and I suggest that your 401K plan, be at least $50,000.00. Fees are around $4500-$6000 depending on which company you use to administer your new plan.  Thank you and good luck on your new business.