Small Business Financing and Franchise Financing Blog

How to Use a Self-Directed IRA for Small Business Investing

Monday, January 25

When many investors think of a self-directed IRA, they believe that it only gives them the opportunity to invest in stocks, bonds, and mutual funds of their own choosing. While it is true that you can invest in these vehicles, a self-directed IRA offers more options. Other investment options include real estate IRA’s, personal business investment, franchise opportunities, partnerships, private equity, and tax liens.
Most banks and brokerage firms neglect to tell you about these other investments due to their vested interest in selling you stocks and bonds. For example, if you decide to invest in your own small business, these firms do not earn any revenue. Guidant believes that you should be aware of all options for investing your retirement funds. After all, it’s your money. Contact a Guidant representative today and find out how a self-directed IRA can assist you with small business financing.

Use Retirement Funds for Small Business Investing

Whether you need start-up funds for a small business, franchise financing, or just want to diversify your retirement holdings, a self-directed IRA can provide you with the flexibility to make your own choices.

The job market has “tanked” and even if you land a position, the wages are not what they once were. Many individuals have taken the opportunity to strike out on their own and follow their dreams of owning their own business. They’ve had enough of the broken promises of job security and are taking control of their destiny on their own terms. And they are financing their small business by utilizing self-directed IRA’s, 401k, and other retirement funds without early withdrawal penalties or taxes.

The Guidant 401(k) Plan for Small Business Investing


The Guidant 401(k) Plan for small business financing allows you to invest your retirement funds in your own enterprise. A brief overview of the process is as follows:
• Guidant will assist you in setting up a C-Corp business organization for your new business or franchise.
• We will guide you through the process of setting up a 401(k) for your new business.
• Your retirement funds will be rolled over into the new Guidant 401(k) plan.
• The new 401(k) plan then purchases shares of the new corporation…namely, your new business.
• This small business funding option provides working capital from your retirement plan without taxes, penalties, or debt.

The Guidant 401(k) Plan for small business financing allows you to start your own business and, at the same time, control your retirement fund growth. If you’ve always wanted to start your own business but financing stopped you, the Guidant 401(k) Plan offers an ideal solution. Contact Guidant today for a free consultation on how to realize your dreams of business ownership.

More Money for Small Business?


It is no secret that the Small Business Administration is not lending as much as it used to. It used to be that a decent percentage of our 401(k) Small Business Financing clients were securing our services in conjunction with an SBA loan. Over the last year, though, this has changed dramatically.

We hardly see people coming to us with the thought that an SBA loan will be a part of their financing package, and, even less do we see people who already have SBA financing in place.

This all may change, though, with new initiatives by the Obama Administration to broaden the Troubled Asset Relief Program. According to BusinessWeek.com (see Obama’s New Push to Help Small Business Get Loans) these initiatives will “lower the cost of capital for small banks and community development financial institutions that present plans to the Small Business Administration for increased small business lending through the SBA’s flagship 504 and 7(a) programs. It will also more than double the maximum size limit of some of its guaranteed loans to small business owners.”

This is all great news; however, we are wondering what, if anything, this will mean for lenders looking for smaller amounts. It used to be that we could refer clients to our lending partners to secure a loan of $75,000 - $100,000. Not anymore. Now all of our partners tell us that the SBA is practically refusing any requests for less than $250,000.

What about the true small business owner?

Fortunately, some thought has gone into these smaller loans. Microloans, which are popular for start-ups and struggling businesses, will see an increase in its maximum amount from $35,000 to $50,000.

Our hope is that this is a sign of things to come: more money for the prospective small business owner – and a jumpstart on the US economy.

How to Choose and Finance a Franchise Opportunity

Wednesday, January 20

Millions have lost their jobs and competition for employment is becoming intense. According to the U.S. Commerce Department, wages and salaries dropped 4.7% in the previous 12 months ending in June 2009. With so many out of work, the competition for jobs is causing wages to fall. This does not bode well for the job seeker. Is it time to finally take the plunge and start that business you’ve always dreamt about? If you find yourself out of a job while the economy sorts itself out, you may want to consider determining your own destiny and purchase a franchise opportunity.

One of Guidant’s specialties is in arranging alternative franchise financing options. In fact, Guidant believes you already have the money to invest in a franchise. It just takes a little ingenuity and creativity (traits that are critical to business success) to arrange franchise financing that provides the best opportunity for success.

How to Choose a Franchise:

The International Franchise Association, of which Guidant is a member in good standing, reports that there are in excess of 1,200 franchise brands in the United States. That’s a lot of due diligence to consider. So, how does one sort through these opportunities and choose a franchise that fits their needs?

Choose a franchise that interests you. What are your interests, goals, and hobbies? Don’t just focus on your current interests. Is there an activity or hobby you previously enjoyed that you haven’t thought about in years? Get creative and brainstorm ideas.

Consider the amount you can invest. This may eliminate higher-priced franchises if you are unable to obtain business financing. We should note here that you may be able to invest your retirement funds into a franchise opportunity. A Guidant representative will walk you through the process. According to the ERISA (Employee Retirement Income Security Act) of 1974, potential franchise owners can finance their own business from their retirement funds with no taxes, penalties, or debt. Intrigued?

Perform due diligence before signing a franchise agreement. Enlist the services of a CPA and attorney before making an investment in a franchise. It’s just good business practice.

A Creative Franchise Financing Option

We understand the hardships associated with obtaining franchise financing in the current economic climate. That’s why we focus on coming up with solutions that allow our clients to obtain the capital they require for business ownership. And for most of our clients, the money is obtainable from their 401k or other retirement funds. We can show you how to investing these savings into a franchise without incurring early-withdrawal taxes and penaltiesYou’ll be able to control your livelihood, the success of your franchise, and the growth of your retirement fund. That’s destiny.

Down Payment for SBA Loan

Friday, January 15


SBA loans are difficult to obtain in the first place. Combine this with the fact that once you do secure your SBA loan you will need to provide at least 20% cash down and it is no wonder that many prospective small business owners don’t even consider SBA loans as a viable financing option.
What many entrepreneurs do not know, however, is that the Guidant 401(k) Small Business Investment Program can be used to provide the down payment for your SBA loan from your existing IRA or 401(k) accounts, tax and penalty free.

This program is different from a loan against your 401(k) plan or a private note against the assets in your retirement plan. The Guidant 401(k) enables you to directly invest your retirement funds into your own business – as an equity partner. Just as it can buy stock in publicly traded companies, your IRA or 401(k) can invest into your privately held business (when done correctly!).

What many people don’t realize is that the cash they need to inject as the initial down payment for their SBA loan may already be in their possession. In fact, many SBA lenders and SBA sponsored programs recommend that people consider the Guidant 401(k) to secure the required cash investment to proceed with an SBA loan. This can be a much better alternative to taking a distribution and paying the early withdrawal penalties and taxes. Unfortunately thousands of people, who don’t know they have a potentially better option, take the distribution and pay upwards of 40% to the government! It’s simply not necessary.

Guidant has worked with numerous SBA approved lenders and SBA sponsored programs, like SCORE, to provide entrepreneurs with an alternative to mortgaging properties and cashing out retirement plans at a severe penalty to meet the down payment requirement.

Do you have money in a traditional IRA or 401(k)? Are you hoping to secure an SBA loan, but are unsure about where your good faith cash is going to come from? Or, are you hoping to obtain a larger SBA loan, but only have enough liquid capital to meet part of the cash requirement?

Call us. You may already have the money you need – you just don’t know how to access it yet.