Solo 401(k) Plan $50,000 loan feature allowing entrepreneurs to finance their new business without seeking outside financing
IRA Financial Group, the leading provider of solo 401(k) plans for self-employed and small business owners, has seen a growing number of small business owners and franchisors using the Solo 401K loan to help finance their business. “With IRA Financial Group Solo 401(k) Plan business funding solution, they can use up to $50,000 of their retirements to finance or fund their business without tax or penalty,” stated Adam Bergman, a tax attorney with the IRA Financial Group.
Internal Revenue Code Section 72(p) allows a Solo 401K Plan participant to take a loan from his or her 401K Plan so as long as it is permitted pursuant to the business’s 401K Plan documents.
A solo 401k loan is permitted at any time using the accumulated balance of the solo 401k as collateral for the loan. A Solo 401(k) 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 lowest interest rate that can be used is Prime as per the Wall Street Journal, which is currently 3.25%.
With IRA Financial Group’s Solo 401K plan loan feature, an entrepreneur who is self-employed individual or small business owner with no employees can borrow up to $50,000 tax-free and penalty free. There are no penalties or taxes due provided loan payments are paid on time. “The Solo 401(k) loan feature has proved to be an attractive business funding option for business owners seeking additional financing for their business,“ stated Mr. Bergman.
IRA Financial Group’s Solo 401k Plan documents will allow a self-employed individual to use a loan from your Solo 401k for any investment purposes, including real estate, funding your business or a new business, tax liens, private placements, etc.
According to Mr. Bergman, the Solo 401(k) Plan loan is the only tax-free and penalty free way a self-employed individual or small business owner with no employees can use their IRA or 401(k) Plan retirement funds to finance or fund their business.
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 leading provider of Solo 401(k) Plan 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 and private business investments without custodian consent.