Fund Your Business or Franchise with Your IRA

Aaaah. Life without a boss or the fear of firings or layoffs. A life in which you are free to think outside the box and direct your own employment destiny. A familiar dream, right? But how many of us, when talking about our dream of self-employment, begin our sentences with, "If only I had the money, I would?"

Well, now there's a way you can get your hands on the money that will allow you to live out your dream of business ownership. And the amazing thing is -- you probably already have that money in your own possession.

Do you have an IRA, 401(k), Keogh or other retirement plan? If so, you're sitting on a potential goldmine, because those funds can be used right now before retirement age to either buy a business outright or to leverage a loan that will let you secure the enterprise of your dreams. And you can tap into those funds without incurring additional taxes or early withdrawal penalties.

By using a structure similar to that of a self-directed IRA, your purchase of a business or franchise is considered by the IRS and Department of Labor (DOL) as an investment into your business made on behalf of your retirement account. Under this structure, your business profits are realized tax-deferred inside your retirement account or are reinvested back into your business. It's an ideal way to launch your business with lower overhead while building up your retirement account.

Don't have enough money in your retirement account to purchase the whole kit and caboodle? Then use what you do have to secure a good loan and reduce your overall debt.

"The more you can put into a down payment for an SBA or other loan, the more favorably the lending institution will look on your request," says David Nilssen, CEO of Guidant Financial Group, a leading financial services company specializing in 401(k) small business financing solutions. "As a general rule, borrowers will need 20 percent or more down, regardless of whether they're buying a new business or an existing one."

The same account structure that allows for IRA monies to be used as loan leverage also allows for multiparty purchases. So you're free to combine your IRA money with the retirement funds of a spouse or partner.

Nilssen points out that entrepreneurs looking to minimize start-up costs or gain additional funding have other options, too. "We're now helping clients secure Debt-Free Home Equity, a unique new way to tap home equity without monthly payments, loans or debt of any sort."

Low- and no-debt financing strategies require careful structuring of various accounts and entities, so they're not for the do-it-yourselfer. Fortunately, financial services companies like Guidant specialize in setting up these types of accounts, so you don't have to.

By combining your retirement account money or your home's appreciated value with your entrepreneurial zeal, you may discover the perfect recipe for business success!

Learn more about the benefits of business financing with retirement funds or Debt-Free Home Equity at www.guidantfinancial.com.


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