As a result of the most recent economic meltdown, banks and other financial institutions have severely limited their lending capacity to self-employed business owners, thus, causing grave financial pressure on self-employed business owners. The Solo 401(k) Plan is a perfect structure for any self employed business owner seeking immediate funds for their business. Solo 401(k) participants can borrow up to either $50,000 or 50% of their account value – whichever is less to help finance or operate their business. Other useful ways of using the participant loan feature is to:
- Lend the funds to a third-party who will pay a higher interest rate
- Invest in a real estate project that offers a higher rate of return than the low interest rate you must pay
- To consolidate debt
- To pay for college expenses
- To pay for unexpected emergencies
- Avoid distribution penalties and gain use up to $50,000 immediately with no restrictions
- Invest in a new franchise or business
- Make any alternative Investment that will generate a higher rate of return than the low Interest rate imposed on you, such as tax liens, private placements, or mortgage pools.
- Invest in a transaction that would otherwise be a Prohibited Transaction under Internal Revenue Code Section 4975.
- Quick, easy, and cheap access to a $50,000 loan to be used for any purpose
Please contact one of our 401(k) Experts at 800-472-0646 for more information.