Qualified retirement accounts such as 401(k), 403(b), Pension, Profit Sharing, and IRA rollovers can put you on the path to business ownership.

You can also use these funds to buy a business with no taxes, no penalties, no loan repayment and no hassle.

Qualified money is money with a tax beneficial wrapper around it because it was accumulated in a tax-benefited plan. Many people have been building retirement accounts with much of their money in qualified retirement vehicles. If these accounts are improperly accessed (unwrapped"), they stand to be hit with up to a 50% tax penalty in state and federal income taxes, depending on tax bracket and state of residence. So, the question to be answered is, "How can a person access their retirement funds to purchase a business without paying a penalty or income tax?"

There are three primary ways to gain access to "qualified" retirement funds for use in a business acquisition WITHOUT incurring penalties and taxes.

1) Self-Directed IRA
This option essentially allows for an unlimited investment in a business but there are limitations on how much ownership the person directing the investment can have in the business.

2) 401(k) Fund with a borrowing provision
This is the most limiting because the IRS Code has maximum amounts which can be borrowed from the fund. This can be a beneficial option when smaller sums are needed.

3) Retirement Program designed to allow for Small Business Investment
This option has unlimited potential. There are essentially no limits on ownership or the amounts which can be used. If integrated into an operating structure properly designed for the specific needs of a business owner, this is an excellent way for a person to acquire a business.

A key consideration when using qualified funds for a business purchase is to maintain compliance with all ERISA (Employee Retirement Income Security Act of 1974) and IRS Regulations. It is extremely important to seek the guidance of Transaction Advisory Professionals experienced in the use of qualified funds for the purpose of acquiring a business.

For more complete information on using qualified retirement funds to purchase a business, visit these websites: