With the sweeping wave of layoffs and the shrinking values in the stock market. Many are faced with a dilemma of finding the money to buy a franchise. Franchise seekers are looking in all areas for cash, including retirement funds.
The question that’s most asked is, “Can I purchase a franchise business using my 401(k) funds?”
The short answer is, “yes.”
The long answer is, “yes, but you need to be keenly aware of the requirements and guidelines.”
As a result of this trend, there has been flood of financial consultants who specialize in knowing these “requirements and guidelines.” Each will guide and consult you through the process, but they are different in one way. Their interpretation of the intricate tax codes revolving around using 401(k) money to fund a business, such as a franchise.
Some interpret loosely, others are strict. To find the consultant that meets your needs and comfort level, ask them to describe their interpretation of the tax code. This will help you in determining if using your 401(k) is a good option.
If you do decide to work with a financial consultant, there are three companies that rise to the top:
