Do you need cash or access to capital?
Maybe your business needs seed capital. Or perhaps you’d like to pay down some debt, fund a real estate flip, buy new equipment, or even have some extra cash on hand.
Learn how to be your own bank by taking a participant loan from the Solo 401k. You can take out 50% of your cash value, with a maximum loan amount of $50,000. Imagine what an extra $50,000 could do for your life. There are so many uses for a 401k loan. Some clients use the funds to start-up a new business. Others take the cash to finance their dream RV and travel around the country.
What We Cover:
- What is a participant loan?
- How does it work?
- Who sets the interest rate?
- What are the loan repayment terms?
- What happens if I make payments late?
- Can I have more than one loan out at a time
- How to take a loan from your Nabers Group Solo 401k
Solo 401k Participant Loan Webinar Replay: Be Your Own Bank
Click below to watch the webinar replay
Interested in Learning More About a Participant Loan?
401k Loans are a valuable feature in your retirement plan. The IRS completely supports 401k loans in an employer-sponsored plan like the Solo 401k.
A Solo 401(k) participant can borrow up to either $50,000 or 50% of their account value with the following terms:
- To be repaid over an amortization schedule of 5 years or less
- Regular payments no less frequently than quarterly
- At a reasonable rate of interest… generally interpreted as prime rate + 1%
There are many other common uses for a Solo 401k loan. If a person wants to make a <$50k investment that would otherwise be a prohibited transaction, they can just borrow the money and do the investment as an individual.
Ready to learn more about the Solo 401k participant loan?
It emphasizes the importance of being prepared and organized, understanding the loan requirements, and having a solid business plan in place. Additionally, the article emphasizes the significance of maintaining good credit, providing accurate financial information, and considering alternative funding options if traditional loans are not feasible. By being aware of these common pitfalls and taking the necessary steps to avoid them, business owners can increase their chances of securing a loan successfully.