By: David Nilssen
When it comes to owning and operating a business, finding the right form of financing can be an arduous task. Where do you find the necessary funding to seed a business, buy a new one or raise additional working capital? Traditionally, business owners have used bank loans, SBA loans, personal loans, credit cards or home equity to satisfy their funding needs. The biggest downside to these sources of financing is the debt load and corresponding payments. Additional debt can impair one’s ability to access money in the event that “life happens.” That is why the idea of using retirement funds to inject cash into a business has been gaining popularity. Although relatively few know about this concept, it has been growing in popularity, especially among those purchasing small businesses and franchises. When structured by experienced retirement account specialists, this strategy allows for an individual's retirement account to invest directly into their business venture… without taking a distribution and paying taxes and penalties.
