Retirement Plan Financing

Reviewed by Ty Crandall

November 14, 2023


Retirement Plan Financing Credit Suite

Retirement Plan Financing Could Be Right For You

When you invest in your 401(k) you are investing in other companies. But there is also a way you can use the same 401(k) to invest in your business. And this is with no penalties! Retirement plan financing could be just the ticket to getting your business funded. And a business with funding is, by definition, far more likely to succeed.

How Does it Work?

Business owners can borrower against their 401(k)s and IRAs to get funds for their business. With 401(k) financing a business owner can quickly and easily rollover their retirement funds from their previous employer or IRA into the new 401(k) plan.

The funds can come from multiple different sources and multiple people. So this can include a spouse or an employee who is looking for an investment opportunity. And, thanks to provisions in the tax code, you can do this without paying a penalty. The IRS calls this a ROBS plan.

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What Are the Benefits of Those Forms of Business Financing?

A few of the many benefits of Retirement Financing include:

  • You can use funds from retirement accounts like IRAs, 401(k)s, 403(b)s, Keoghs, SEPs, etc. So, this is without incurring early distribution taxes or penalties
  • Start a small business with minimal to no debt while securing significant tax benefits
  • You can use up to 100% of retirement funds, or use a portion as a down payment on an SBA or unsecured loanRetirement Plan Financing Credit Suite
  • Combine your retirement funds with the retirement funds of a business partner, spouse, or even an outside investor
  • You can save thousands in interest fees and protect your personal credit
  • Lower business overhead while aggressively growing retirement accounts
  • Secure rates of 5% or lower.

Retirement Plan Financing vs. Business Credit Building

There is an alternative to retirement plan financing. And that is building business credit.

Small business credit is credit in the name of a business. It does not connect to the consumer credit of a business owner. And this is true, not even if the owner is a one owner and the only employee of the small business.

Furthermore, with business credit, your IRA or 401(k) will not be on the line if your business does not succeed. And that is not necessarily something that other forms of funding can promise.

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Retirement Plan Financing Is a Great Option

Borrowers have access to their own specialist to assist in the safe rollover process. And with retirement plan financing borrowers can secure financing for as much as 100% of the value of the 401(k). So, why not try it? Coupling 401(k) financing or IRA financing with business credit building can be a great combination for business financing success.

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Credit Suite

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