Small Business Financing and Franchise Financing Blog

A Diamond in the Rough

Tuesday, March 9
In Entrepreneur Magazine’s February issue, one article highlights the different options a small business owner has should a bank pull their credit line (see What to Do When the Bank Pulls Your Line of Credit).

One interesting tidbit (and we mean tidbit) is the suggestion of considering retirement funds as a source of capital should unexpected occur. While retirement funds have always been considered off-limits, we are finding that more and more industry professionals are suggesting retirement funds as a source of cash.

Reporter Julie Bennett interviews Guidant Financial Group Cofounder David NIlssen, who says that, while retirement funds should not be used as a last-ditch effort to save a failing business, the pros of using this funding method include no debt and no monthly payments.

Sounds good, right?

Pursuing another financing method can make a lot of sense if the bank route didn’t go so well in the first place. And, with banks seemingly lending less and less, and credit lines being pulled more regularly, perhaps retirement fund financing could become more and more mainstream.