401K Business Funding

HOW TO USE YOUR 401K TO BUY A FRANCHISE

Did you know you are allowed to convert your 401K into cash to buy a small business without incurring any taxes or penalties.

Over the past 20 years, we have helped hundreds of clients do just this with our 401K Business Funding Plans.

HOW DOES THIS WORK? 

With the adoption of a 401K business funding plan, you are allowed to convert your 401K into privately-held stock in your new business with no taxes or penalties due.

For this tax-deferred transfer, we create a 501A trust and couple it to special “exemption clauses”. 

In this way, you would not be “cashing out” your 401K. When you invest these savings into a business, the IRS accepts this as a tax-deferred “rollover,” which allows you to keep the 35% to 40% you would have paid in early-distribution taxes and invest that extra money in the business. It’s pretty much a no brainer.

We have helped hundreds of clients over the past two decades get tax-free access to their 401K, 403B, 457, and IRA funds to buy or startup their own businesses.

This is a great alternative to borrowing money from a bank since you won’t have to pay back any principal or interest payments.

WHY PICK US?

• For starters our fee is 40% lower than other firms.
• Unlike others that require their fee upfront, we don’t charge a dime until after our clients receive all of their money.
• The other firms charge $1,600 or more a year in plan maintenance fees. We don’t charge a dime.
• We have a reputation of helping clients years later at no cost. 

MORE CASH TO BUY YOUR FRANCHISE

With the example below, for every $100,000 you rollover from your 401K, you get to keep $41,000 you would have paid in taxes and invest it in your new business.

HERE ARE THE NUMBERS

HOW TO USE YOUR 401K TO BUY OR START UP YOUR OWN BUSINESS - AND GET A DOWN PAYMENT FOR AN SBA LOAN, IF NEEDED:

How to get an SBA Loan Down Payment 

•    Last year, the SBA backed 52,000 loans for small businesses. 
•    The 7A loan can be used to finance any business purpose, including a startup, an acquisition, working capital, salaries, equipment purchases, inventory, and real estate. 
•    All SBA loans require you to make a down payment ranging from 10% to 30% of the principal. The inability to make a large enough down payment can disqualify you from being approved. 
•    There are other forms of funding to cover the loan down payment, including tax-free 401K and IRA rollovers. 
•    If you have socked away savings in a 401K or IRA account, there is a way to use these dormant funds for your SBA Loan down payment. 
•    For years, SBA lenders required every investor in a new business to have a 20% interest or more to cosign the note. A 401K could not be part of the investment because it could not “encumber itself”. 

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