Do you have 401k-IRA funds out there?
You may be able to invest or loan some of that money to your new or established business…
Have you tried to get traditional bank funding for a new or existing business venture?
If your cash in the bank, collateral or credit aren’t quite high enough, your bank may not be able to help.
So, you may have to look at other sources. While we’d all like to use 100% of someone else’s money, that is not always possible. 401k-IRA financing could be a good choice if available.
Consider using your 401K-IRA funds either as collateral, a pool to borrow against (giving yourself a business loan), or roll over part of the funds into your company’s new 401K-IRA, then purchasing shares in your company. You will want to have professional help with any of these, but it can certainly be explored and may give you access to substantial cash. Done correctly, there will be no penalties or taxes due when making this rollover or loan.
You want to be sure your paper trail is strong, that you have all the required legal entities and documents, and that you follow the rules. But, this can be a great way to fund your business. It will give you flexibility to grow and save further in the future for retirement through that business growth.
So if you have limited funds elsewhere, not enough cash in the bank to satisfy a traditional lender, consider the 401k-IRA option:
– minimize your fees, whether loaning money to your company at a reasonable rate or rolling over the money,
– no taxes or penalties as you are not doing a ‘withdrawal’ before authorized.