Are you aware that there is a little-known way for funding a small business using your 401k that doesn’t require an obscene repayment schedule? In fact, it is an opportunity to use those monies for small business funding and to invest in yourself, your business idea, and your future. It’s completely above board and
allowed by the IRS as a legitimate small business financing option. We’re getting a little ahead ourselves here, so let’s compare two options for funding a small business, a traditional bank loan and the 401k BORSA plan.
Bank Loans for Small Business Funding
We all know the procedure for applying for a bank loan. You gather up all your documentation and sit across from the loan officer while they scrutinize every facet of your life. And if you are applying for small business funding, you can expect the level of interrogation to be “ratcheted up” considerably. Even if your credit rating and business plan is in order, you stand a very good chance of being denied due to the ongoing credit crisis.If you choose to pursue this option there are some things that you should consider before obtaining small business financing from a bank.
The bank is going to want you to share in the risk before approving small business funding. You may have to “put up” collateral such as your home or use your savings to invest in the business. I know you have confidence in your business idea but are willing to put your house on the line? If you use all of your savings, do you have any other resources should an emergency arise?
The BORSA Plan for Funding a Small Business
BORSA stands for the Business Owners Retirement Savings Account and is a unique and beneficial option for obtaining small business financing using your 401k. You are allowed to use your retirement funds to invest in a small business without paying taxes or penalties. And best of all, you won’t have to pay it back! Basically, here’s the way the plan works:
The key point here is that you are not withdrawing money from your 401k, you are simply investing it in a self-directed retirement plan, namely, the shares of your new company. The benefits are:
The BORSA Plan is not without its risks, though. As you are aware, the IRS doesn’t appreciate anyone using tax deferred retirement funds without paying taxes and penalties, so compliance is a big issue. This is an issue that is easily resolved by employing the services of a qualified CPA knowledgeable about ERISA (Employee Retirement Income Security Act). DRDA is a CPA firm out of Houston that has systematically designed the BORSA Plan to accommodate this unique small business funding option.
Pick up the phone right now and call 281-606-5719 !! It's your money, your dream, and if you believe you have a solid business idea and are willing to put your all into bringing it to life then you deserve access to your own money without tax or penalty! The BORSA Plan will do that for you. Call now at 281-606-5719 and ask for Suzy Granger. If it's after normal business hours then leave a message, or fill in the short form below. Either way, your inquiry will be returned immediately upon resumption of regular business hours. Get the money you've already earned and start your dream, now!
