401(k) Plan financing strategy to allow entrepreneurs to access retirement funds tax-free and use funds for business acquisition purposes
IRA Financial Group, the leading provider of self-directed retirement solutions, including the Solo 401(k) plan, announces the introduction of a new business acquisition financing solution for retirement investors looking to use retirement funds in an active business. The new 401(k) plan financing solution involves taking advantage of the IRS approved plan loan feature. A 401k loan is permitted at any time using the accumulated balance of the solo 401k as collateral for the loan. A Solo 401k participant can borrow up to either $50,000 or 50% of their account value – whichever is less. This loan has to be repaid over an amortization schedule of 5 years or less with payment frequency no less than quarterly. The interest rate must be set at a reasonable rate of interest – generally interpreted as prime rate as per the Wall Street Journal. As of 10/04/13, the Wall Street Journal prime rate is 3.25%, which means participant loans may be set at very reasonable Interest rate. The Interest rate is fixed based on the prime rate at the time of the loan application. The 401(k) plan loan feature has proved to have been a valuable financing tool for many entrepreneurs looking to use retirement funds to fund or finance a business,” stated Adam Bergman, a tax attorney with the IRA Financial Group.
According to Mr. Bergman, as a result of the complexities and costs involved in the Rollover Business Start-Up (ROBS) structure, many entrepreneurs looking to finance or fund a new a or existing business have turned to the 401(k) Plan loan feature as an alternative to the ROBS solution. The Solo 401k loan financing option is a perfect for an entrepreneur or small business owner who needs less than $50,000 for a new or existing business. “With IRA Financial Group’s Solo 401(k) plan loan financing option, plan participants can borrow up to either $50,000 or 50% of their account value – whichever is less to help finance or operate a new or existing business,” stated Mr. Bergman.
The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.
IRA Financial Group is the market’s leading provider of “checkbook control” retirement solutions. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.