Statistics show that more than one million people in the United States to start a new business every year. That number would be much higher if all potential entrepreneurs have the necessary funding to get businesses up and running. To achieve their dream of business ownership, entrepreneurs find new ways and innovative ways to finance their new business.
By Leonard Fischer, President and CEO BeneTrends, one of the new financing option is the use of existing retirement pension funds-a person, profit sharing, 401 (k), IRA-which allows the person to start a business he or she always dreamed of without a tax penalty , consequences or mountains of debt.
Under the Employment Retirement Income Security Act (ERISA), pension funds can be transferred into capital that can be used for business investment or operations. If someone has more than $ 40,000 in retirement accounts and is not currently employed by the company that holds the fund, he qualifies for the Small Business Administration (SBA)-recognized approach to financing to start business.
Pension funds can be used for business purposes, including:
• Buying a franchise or existing business
• Start-up costs, such as purchasing property, equipment, etc.
• working capital, including paying salaries, franchise fees, etc.
• Business expansion, such as additional funding franchise, location, etc.
• Equity to the SBA or other loans.
Shadow dipping into retirement a person can cause fear some. Through the investment strategy of the individual actually has more control over his / her retirement, rather than obtain a minimum growth depends on the stock market, the savings are actually being invested in the business itself. This approach often allows one to set aside more money for retirement than before.
“Today businesses face tremendous competitive environment, the complexity and opportunity, then start a business the right way is more important than ever before,” says Dr. Germain Boer, Director of Vanderbilt University’s Center for Entrepreneurship. “The method of financing is a good choice for an individual who has accumulated funds in the / his retirement account himself.”
The whole process typically takes 2-4 weeks to complete, and can be done via telephone, email, fax, FedEx and regular mail.
Working with an expert who experienced the benefits of the work plan, starting a business is as simple as these four steps:
Step 1: Establish C-corporation.
Step 2: the new company pension plan.
Step 3: Funds rolled over into the new pension plan of the corporation.
Step 4: the new retirement plan purchases of shares of the corporation.
“So many people have watched their dream of having their own business out of the window due to lack of financing options. We help people achieve a dream every day by using the money they have,” said Fischer.
If you’re ready to explore these innovative financing options, be sure to consult an expert to guide you through a special process.