A Novel Way of Financing a New Business

Obtaining funds to start a business can be difficult. Lenders even with a guarantee from the U.S. Small Business Administration (SBA), expect the borrower to bring sufficient capital to the table as well as quality assets as collateral. 

Here and there, you hear about how people manage to start a business with nearly nothing and you wonder how they did it.  You hear about people who max out all the credit cards, continually transfering balances one from card to another.  And that’s a job, to manage that charade.

Recently, I was reading an article on SmartMoney.com about a startup business owner who was able to fund his new business with a 401(K) rollover.  It’s a really clever strategy if you can pull it off.  It’s known as a Rollover as Business Startup or ROBS.

You set up a corporation with a new 401K.  Then, you roll the funds from your old account into the new one to purchase stock in the new company.  Alas, you now have the cash to fund your new company. Got all that?

For more information, please see article, How to Fund a New Business with a 401(K) in the digital version of Smart Money.

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About suzanne kaller

Business Librarian at Arapahoe Library District in the suburbs of Denver, Colorado. Engaged in business outreach and general reference serv

Posted on April 22, 2011, in business, Entrepreneurship and tagged , . Bookmark the permalink. Leave a comment.

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