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How to Use Retirement Plan Financing to Recession Proof Your Business and Beat Inflation

Faith Stewart
December 1, 2021
retirement plan Credit Suite

retirement plan Credit SuiteHard times are on the way. All you have to do is turn on the television to see it. Prices are rising and so are interest rates. The key to surviving inflation and recession is to be prepared. This means anticipating cash needs and having the funds available before things get bad. If you need financing, don’t wait. One great option is retirement plan financing.

Retirement Plan Financing and Other Funding Options

There are a number of options. Loans, lines of credit, and credit cards are all possibilities, but there are other options that may be even better. In fact, one specific option is available to some regardless of credit, and it’s interest-free.

Retirement Plan Financing

First, retirement plan financing is not a loan from your retirement funds. So, you will not have to pay an early withdrawal fee or pay a tax penalty.  Even better, there will not be any interest.

Credit Suite offers a powerful and flexible way for new or existing businesses to use retirement funds. In as little as three weeks you can access money for your business. Then, not only will you have more control over the performance of your retirement assets, but you will get the working capital you need for business growth.

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This Rollover for Working Capital program is known by the IRS as a Rollover for Business Startups (ROBS). According to the IRS, a ROBS qualified plan is a separate entity with its own set of requirements. The plan owns the business, not an individual.

Some necessary IRS forms for a ROBS plan are Form 5500 or 5500-EZ and/or Form 1120.

Do You Qualify?

There is no need for financials or good credit to get approval. All the lender needs is a copy of your two most recent retirement fund statements. Also, the plan has to have a value of more than $35,000. If it does, you can receive whatever percent of your plan is “rollable” as financing.

In addition, the plan cannot be from a business where you are currently employed. It has to be from previous employment and you cannot be currently contributing to it.

Learn business loan secrets and get money for your business. via Credit Suite BizLoanSecNotRecCJ2

Learn business loan secrets and get money for your business.

Lenders are not basing approval decisions on creditworthiness. They just need to see that the plan qualifies. As a result, this program is perfect for business owners with credit issues.

How Does Retirement Plan Financing Work?

You’ll set up a plan for your company and invest it in that company. Then, your business becomes cash rich and debt-free. However, you do need to work with a CPA. They can help handle things properly.

Why is This Better than a Distribution or Loan from Retirement Funds?

Unless you’re 59 ½ years old or older, you will pay an early withdrawal penalty for a distribution. This is basically paying to use your own money! Don’t do that.

If your plan allows for loans, the IRS will only let you borrow up to 50%, up to $50,000. After that you have to start paying taxes. Of course with a loan, you’ll also pay interest.

Inflation and Recession Planning

If you have eligible retirement funds, you need to take advantage of this type of program now. We are already seeing the effects of inflation, including an increase in social security checks to account for rising prices. Recession is most definitely on the way.

Learn business loan secrets and get money for your business. via Credit Suite BizLoanSecNotRecCJ2

Learn business loan secrets and get money for your business.

If you have these funds on hand and available to use, you will be able to absorb increasing costs more easily. You’ll also avoid the difficulty that comes with trying to access financing during a recession. When prices and interest rates rise, you’ll be ready.

Credit Suite Is Here to Help

Not only can Credit Suite help you set up your retirement plan financing, but our business credit specialists can help you find other ways to fund your business. We can help you assess what types of funding you are eligible for, and guide you to the steps you need to take to qualify for more. Set yourself up for success despite what the economy brings.

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