by Karen Demasters
More entrepreneurs are turning to their retirement savings for the start-up funds they need to start new businesses, say advisors and facilitators who deal in this market.
A self-directed 401(k) can be used to start any enterprise that qualifies as a business under the IRS code, notes William R. Seagraves, CEO and president of Catchfire Funding in Denver.
“My clients are like myself, they are serial entrepreneurs who want to jump out of the corporate track,” says Seagraves. Catchfire Funding helps arrange the self-directed 401(k) plans for businesses financing.
The trend comes at a time when the U.S. Small Business Administration has cut back on loans, although Seagraves and others say it is too early to tell if the two trends are connected.