401k Business Financing

Using a Solo 401k plan allows you to borrow money from your existing retirement account without the qualification restrictions of traditional lenders. Yes, you have to pay the loan back (in 5 years), but guess who you are paying? You! When you make a loan payment, you are depositing the money back into your 401k account. Sweet! That's business financing the way it should be!

Who better to make a commitment to your new venture than you! Banks and investors ask lots of questions and have some very unreasonable demands, guidelines and benchmarks. The pressure to be profitable is intense and can sap the fun out of your dream project. And it can leave you in substantial debt that may derail not only your current project, but others that follow. Using your 401k (or IRA) keeps you in control and allows you to create and grow freely, without answering to lenders and equity partners.

When trying to get my ecommerce store funded, I turned to traditional bank lending because I wanted to remain in control and didn't want to give up equity. I learned that banks love to work with established profitable companies and that they want NO part of startups. Then I heard about a self financing option called ROBS (Rollover for Business Startup). This was a game changer for me as I had money in my 401k from a previous employer. ROBS allowed me to use this money (penalty free) to fund my new project without having to qualify for a loan, without paying high interest rates, without giving up personal collateral and without giving up equity. It basically allowed me to invest in the person who believed in me the most - ME!