The Benefits of This Service
Many startup business owners may have access to readily available cash, regardless of their business or personal credit. If you have a retirement account from a former employer (not your current employer), you can get access to half of that money, up to $50,000, penalty free. You will be borrowing the money from your account, paying it back over a five-year schedule, with all of the principal and interest payments going right back into your retirement account! The interest rate is around prime plus 1%, and there is no credit check involved. This is an IRS-approved program, so as long as you pay the money back to your account, there are no tax consequences.
There is another program called a self-directed IRA that you can also use if you are willing to set up a C-Corporation (which our partner company does for you). This program is a bit more involved, but it does have some significant advantages over the 401(k) loan program. Under this program, you will have no loan to pay back, as you are investing your retirement money in your business, tax-deferred. There is no business plan needed and no loan application paperwork. You can use this money for any purpose, including salaries, equipment, inventory, rent, advertising, or even as a down payment for another loan, such as commercial real estate financing. If you are interested in this program, please contact us, as it does not fall under one of our deferred payment programs.
What We Will Do for You
If you do not already have a self-employed business set up (either a sole proprietorship or LLC), we will set this up for you, and work with one of national 401(k) plan administrators to get your account set up. You must have a retirement account from a prior employer (not your current employer’s account) that can be rolled over into the new self-directed 401(k) program. Once you complete the rollover of whatever funds you want to use, you can then borrow up to 50% of this (up to $50,000 in borrowed funds) to use for any business purpose, even to start up a business or purchase a franchise. Here are some more details:
- There is no business underwriting involved. You can be a home-based business using just your cell phone with no DUNS or BIN number, no business license, and no business credit
- Your 401(k) will be managed by a national low-cost retirement plan administrator
- There are no business tax forms you need to fill out if you are set up as a sole proprietor, other than a “Schedule C” if you have business income and/or expenses to report.
- Any third party fees for setting up an LLC or Corporation must be paid separately.