(This guest post is about using a 401(k) to start a business. It’s another form of franchise financing you need to explore. And it’s courtesy of Guidant Financial-I’m an affiliate.)
If you’re looking to buy a franchise to fulfill your dreams of entrepreneurship, your first thought may be that you’ll need a small business loan. But there are other ways to finance that new business; using a 401(k) to buy a business is a popular option. Maybe you need a few reasons (7) to consider using this franchise financing method?
401(K) Franchise Funding: Can I Use My 401(K) To Start A Business?
1. You can start a franchise business without going into debt.
Using your retirement account to purchase or start a franchise business means you don’t owe anyone—and therefore don’t have to jump through their payback hoops.
2. Don’t risk your home or other assets.
With a loan you’ll need to put your own assets up as collateral. Even with an unsecured loan you’ll need great personal credit, a solid business plan and years of earnings projections. Why not tap into the money you’ve already got and put it to work?
3. Investing in yourself by using your 401(k) puts you in control.
When you use your own money to invest in a new business, you’re in control. You call the shots. You’re the boss. Why dance to someone else’s tune?
4. Using a 401(k) to start a business is completely legal—when done correctly.
Thanks to a law passed in 1974, it is absolutely legal to rollover your 401(k) for start-up capital to buy a franchise. As long as you follow these steps:
5. No interest payments.
Just a reminder here, because it bears repeating. If you don’t owe, you don’t have to pay—either a principal amount or interest.
6. Put your profits back into the business.
Without loan payments hanging over your head, you’re free to put money back into your business. With the money you’re not forking over to a bank or other lender you can afford a great advertising campaign, or fresh coat of paint on the building, or a consultant. The possibilities are endless and they’re up to YOU.
7. Maximize your wealth by investing in your business.
Using a 401(k) to finance a franchise makes some people nervous. “But what about my nest egg?” Here’s the thing: when you leave your retirement money in someone else’s hands you give up control. And we’ve seen over the past decade that many large institutions aren’t concerned with average citizens and what they’ll live on in their golden years. The person who knows what’s best for you is you.
So on that note: Take charge of your own future. Use your 401(k) to better your life. Start the business you’ve always wanted. Be the CEO of your life.
Or, as The Franchise King® says, “Own What You Do!”
Good news! you can use all…or one of those 7 reasons to buy a franchise using your 401(k).
Finally, are you going to consider using 401k franchise financing to be your own boss with a franchise?
Go to Guidant Financial for more information. Make this your year to be the boss.
This content was originally published here.