Buying A Small Business Using Retirement Dollars And The SBA
The biggest hurdle to buying a small business is often financing the acquisition. If your credit score is above 675 you may fund your down payment with a retirement account. You can then fund the balance with an SBA 7(a) Loan. Retirement funds are tax-deferred and penalty-free as the down payment when securing an SBA 7(a) loan. 20% is typically allocated to the down payment and 80% funded by the SBA 7(a) program. Qualified Financial Institutions are aware of the requirements and will keep you in compliance and make the necessary filings. Rollovers have particular requirements set by the Internal Revenue Service, Department of Labor, and ERISA. These transactions must be done properly by qualified financial institutions.
Buying a small business using retirement funds is not a decision to be made lightly. Your financial future will be affected by the purchase of a company. Much of the risk of buying a business can be reduced by understanding the reasons why businesses fail.
SIX REASONS BUSINESSES FAIL
1. Not understanding your market better than the competition
2. A business model that is flawed
3. The wrong location
4. Failure to advertising and market properly
5. Failure to change with the industry and market
6. Unable to hire, train and retain employees
You should only consider financing companies that you can navigate away from the perils that cause business failure. This financing technique works for existing businesses, and franchises. Buying a franchise is often a safer way to get into a business. Many businesses have been funded with conventional and creative business funding tools discussed in this article. These techniques enable entrepreneurs to combine traditional and alternative financing solutions. Take the stress out of financing a new or existing business so you can focus on the success of your business. Learn more about these business funding solutions with this Financial Funding Tool. click here