Forget About A Loan For Your Startup Get A Self-Directed 401k

Doesn’t owning your own business sound great? I sure think it does. Of course owning your own business comes with many of its own stresses and trials but there are plenty of other upsides that can outweigh the negatives of owning your own business. Maybe you have actually thought of the business you would love to start or perhaps you have strongly considered quitting your job to start your own business. Most of us who have thought of starting our own business come across the biggest issue we have with starting our own company. That issue is finding the money to start doing what we want. One of the biggest issues to starting your own business is coming up with the capital to actually be able to do what you want to do.

There is a way to come up capital without having to go out there and get a loan or find someone willing to invest in your company. You can actually come up with this money yourself with the money you have in your 401k.

You are probably wondering how this is possible. It is possible through a self-directed 401k with Mysop plan. So how does a self-directed 401k Mysop actually work? Below is a visual and step by step instructions on of how a self-directed 401k (mysop) actually works as well as how Accuplan Benefits Services will help you thorughout the process. The following example is with a bed and breakfast business.

Mysop Bed and Breakfast Example

  1. Accuplan creates a C-Corporation.
  2. Accuplan creates your personalized mySOP plan and your C-Corp adopts the plan. A 401(k) is also established for later contributions.
  3. Bob and Carol roll over some of their IRA monies into the mySOP.
  4. Bob and Carol, acting as Manager and Trustee, set up bank accounts for the C-Corp and the 401(k).
  5. Bob and Carol, acting as Trustee of the mySOP (Self Directed 401k), purchase shares of the C-Corp which will be the bed & breakfast.
  6. The C-Corp now purchases the bed & breakfast from the current owners for $500K.

The following are a few of the benefits to using a Mysop. If you are stil not sold that a Mysop is for you rather than a regular business loan make sure you have thought about the following benefits to a Mysop.

  • Allows for retirement cash to be placed into a company without it being a loan.
  • Provides capital for start ups or other cash strapped businesses.
  • Provides for recourse loans when non-recourse loans are not available or practical.
  • You get to invest your retirement monies into something other than stocks and bonds.

A self-directed 401k Mysop plan can be just what you need to actually start that business you have always wanted to start. If you need help or more information about setting up a self-directed 401k Mysop plan then contact us today.

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