How to Buy A Business with 401(k) Funds

People always ask can I buy a Business with 401(k) funds? How can I use my IRA to finance a business? Click HERE to learn more There is …


People always ask can I buy a Business with 401(k) funds? How can I use my IRA to finance a business?

Click HERE to learn more

There is really only one way to use 401(k) or IRA funds to start a business without tax or penalty. The structure involves the formation of a C Corporation and the adoption of a 401(k) qualified plan. Your existing retirement funds can then be rolled into the newly adopted 401(k) Plan tax-free. The 401(k) Plan will then purchase the stock of the new corporation. The new corporation will then use those funds to purchase a new business or franchise tax-free!

Claim up to $26,000 per W2 Employee

  • Billions of dollars in funding available
  • Funds are available to U.S. Businesses NOW
  • This is not a loan. These tax credits do not need to be repaid
The ERC Program is currently open, but has been amended in the past. We recommend you claim yours before anything changes.

Using the Rollover Business Acquisition structure, one can use 401(k) Plan funds to buy a new or existing business or franchise tax and penalty free while being able to earn a reasonable salary from the business. The Business Acquisition Solution is the only IRS approved structure for using IRA or 401(k) plan funds to buy or finance a business you will be actively involved in.

The following describes the steps to create an account structure that allows you to buy a business with 401k funds. A retirement account facilitator can help you roll existing funds into a new business or franchise with the following steps:

  • Form a Corporation. The Corporation Sponsors a 401(k) Plan which has been designed to allow for investment into your corporation
  • Rollover IRA, 401k or other retirement funds into to new 401(k) Plan
  • New 401(k) Plan Invests in the Corporation
  • Your new 401(k) Plan purchases stock in the corporation. This 401(k) Plan now holds stock in the corporation and the business is debt-free and cash-rich from the sale of the stock. At this point, the corporation will now be able to purchase your new business or franchise.
  • Buy a business with retirement funds

Many entrepreneurs will take a taxable distribution from their retirement plan in order to come up with the necessary capital to purchase a business. There is, however, a much better way to use your retirement funds to help purchase your business. This funding solution is a combination of a 401(k) and a corporation.

Your retirement account actually takes ownership by purchasing stock in the corporation – similar to your IRA purchasing shares in a publicly traded company. The benefits? You have 401(k) plan for your new business. As the company prospers, the value of the retirement plans investment increases – tax deferred. And, there is no loan and thus no payments.

Request information on buying a business with 401(k) funds.


Does Your Small Business Qualify?

Claim Up to $26K Per Employee

Don't Wait. Program Expires Soon.

Click Here

Share This:

In this article