Business owners Discover New Way to Finance Dream
Figures show that far more than 1 million men and women in the United states begin a brand new organization each yr. That number will be much higher if all of the would-be entrepreneurs had the financing necessary to obtain an enterprise up and operating. So that you can achieve their dream of company ownership, entrepreneurs are discovering new and innovative methods to finance their new ventures.
According to Leonard Fischer, President/CEO of BeneTrends, 1 of those new funding alternatives is the use of a person’s existing retirement funds-a pension, earnings sharing, 401(k), IRA-which permits that individual to begin the company she or he has constantly dreamed of without tax penalties, implications or mountains of credit card debt.
Below the Employment Retirement Earnings Security Act (ERISA), retirement funds may be transferred into usable capital for enterprise investments or operations. If a person has far more than $40,000 inside a retirement account and just isn’t at present utilized from the business that retains those funds, she or he qualifies for this Small Enterprise Administration (SBA)-recognized funding approach to begin a business.
Retirement money may be used for any enterprise purpose, including:
• Purchasing a franchise or current business
• Start-up expenses, including purchasing property, equipment, etc.
• Working richesse, such as paying salaries, franchise fees, etc.
• Organization expansion, such as funding additional franchises, locations, etc.
• Equity toward SBA or other loans.
The thought of dipping into one’s retirement can cause some apprehension. Through this investment technique a person actually has a lot more control over his/her retirement-instead of gaining minimal growth dependent on the stock market, these savings are actually being invested in one’s own enterprise. This method typically makes it possible for an individual to set aside far more money for retirement than ever before.
“Today’s entrepreneur faces an environment of tremendous competition, complexity and opportunity, so starting a company the right way is a lot more important than ever,” says Dr. Germain Boer, Director of Vanderbilt University’s Center for Entrepreneurship. “This financing method is a good option for a person who has accumulated money in his/her retirement accounts.”
The entire process generally takes two to four weeks to be completed, and might be done by phone, email, fax, FedEx and regular mail.
Working with an experienced employee benefits plan expert, starting an organization is as simple as these four steps:
Step 1: Establish a C-corporation.
Step 2: The new corporation creates a retirement plan.
Step 3: Funds are rolled over into the corporation’s new retirement plan.
Step 4: The new retirement plan purchases the stock of the corporation.
“So many men and women have watched their dream of owning their own business go out the window due to lack of funding alternatives. We help folks achieve that dream every day using money they already have,” says Fischer.
If you’re ready to explore this innovative funding option, be sure to consult an expert to guide you through the specialized process.
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