Many new business owners are choosing to preserve their own cash and obtain funding in other ways. One popular funding option is to access traditional IRAs or 401K funds (from a previous employer). If you have retirement funds and you have not yet paid taxes on those funds, you can use them toward the investment of a business. This can be for a new business as well as for an existing business (for recapitalization).


Today, your current retirement may be in a 401K or IRA (a “qualified retirement” plan) at a brokerage firm, where they more than likely invested your retirement by buying stocks in publicly held companies, using your retirement dollars as working capital to build their businesses with hopes and expectations of receiving a positive return on investment.  Consider this option, investing your retirement dollars into a privately held company, YOUR company by buying stock and using these funds as working capital to build YOUR business without tax or penalty.






When investing retirement funds into your business

·         It is NOT a loan

·         You are NOT borrowing against your retirement.

·         You are NOT required to pay it back.

·         You are NOT taxed or penalized by the IRS for investing and buying stock in your company.

·         Fund your business 100% using retirement funds = DEBT-FREE funding.


The benefits are powerful and easy to understand…

·         You invest some portion of your retirement funds in your business giving you more control over the

          performance of your retirement plan assets.

·         You use a safe, proven plan based on long-standing provisions of the Internal Revenue Service

·         You gain business equity and improved cash flow position from the start.

·         You accelerate business profitability by managing the amount of debt your new business takes on.

·         You secure funding fast – typically 3-4 weeks or less.

·         You can set aside tax deductible savings, up to $59,000 per year.

·         Short on “Liquid Cash” for an SBA loan? --  use retirement!




STEP I:  Form a C-Corporation

We form a C-Corporation for you and your new company or work with your attorney during the formation process.  We provide you with your Corporation Kit; Corporate binder, minutes, by-laws, stock certificates and corporate seal.  WHY C-CORPORATION?  A retirement plan is allowed to purchase stock of the plan sponsor, so long as the plan sponsor is a "separate taxpaying entity." The only corporate entity that is considered a "separate taxpaying entity" is a C-Corporation.


STEP II:  Corporation Sponsors a 401K Plan

We work with you to open up a New Company 401K Profit Sharing Plan account at Wells Fargo Advisors (Recommended).  This unique 401K Plan has been designed to allow for investments into your corporation.  The 401K Plan has been pre-approved by the IRS.


STEP III:  Rollover to a new 401K Plan

We will help you through the whole process of moving your retirement funds from your previous employers 401K or IRA into the new company sponsored 401K Plan.


STEP IV:   401K Plan Invest in the Corporation

Your new Company sponsored 401K Plan purchases stock in the corporation.  The 401K Plan now holds stock in the corporation and the business is DEBT-FREE and CASH RICH from the sale of the stock.  At this point, the corporation business checking account is funded and the corporation will now be able to purchase your new business or franchise.


No tax or penalty from the IRS?  When using retirement funds to invest in your business, you are rolling over funds from a current “qualified” retirement plan (401K from previous employer or IRA (not ROTH or inherited IRA) into another “qualified” retirement plan, your company sponsored 401K, thus NO personal distributions are being taken.









The average length of time to fund the corporation is 3 - 4 weeks. Ask us about the “Safety Net” Program, where the funding process can take place in 5 - 7 business days.







How long does this process take?





The fee to set up your Corporation, design and install the plan is a one time, upfront fee of $4,995. The one-time fee of $4995 is also considered an investment toward your personal stock ownership into your company. As I share with candidates, you may pay that to us directly however, we indirectly give it back as an investment of personal ownership into your company. A Third Party Administration fee of $120/mos. will be billed, beginning the month after the effective date of the plan.







How much does it cost?









Yes, you can pay yourself a salary as soon as you capitalize your business (typically 4 to 5 weeks). We suggest that you consult with your tax advisor regarding salary and payroll.







Can I take a paycheck?




The IRS has a formal review process that they implemented after issuing their operational guidelines in October, 2008. Your Third Party Administrator will maintain all of your 401k Plan records. If you were to receive an IRS Inquiry letter, Your Third Party Administrator would assist you in accurately answering all of the questions. Since the IRS implemented their review process, your Third Party Administrator has never had a plan inquiry escalate into a full plan audit. However, if your plan was audited, your Third Party Administrator would assist you until the audit is completed.





What kind of support do I receive in the event that my 401K Plan is audited?



The answer is found in the law. Section 408(e) of ERISA allows for investment in "qualified employer securities". Congress defined "securities" as stock in a corporation. Only two types of for-profit corporations exist, an S-Corp and a C-Corp. In order to retain its flow-through provisions, an S-Corp can only be owned by an individual or a qualified subchapter S trust. Since a retirement plan is not an individual or a qualified subchapter S trust, it cannot own stock in an S-Corp. The C-Corp is the only entity that allows for “common stock” purchases.





Your tax advisor is an integral part to this process. To insure that your opening balance sheet is correct and the ongoing administrative responsibilities are met, we recommend that you meet with your tax advisor.







Why a C-Corporation?





Why should I consult with my CPA prior to starting the process with Phoenix Funding Source?



While equity in your home is generally accessible, under favorable rates and terms, a home equity loan to start a business has consequences that are not always fully thought through. When an entrepreneur borrows the equity from his home to provide equity to a business, several things may occur: 1)The entrepreneur puts their home at risk. Often they have paid off their home and secured their place of living for the retirement years. They now have a mortgage on the home that will require a portion of their retirement savings or earnings to be used to service the mortgage in order to continue living in their home. 2)By borrowing additional money, they have reduced the amount of money they can borrow from a bank to start or operate their business. When a lender underwrites a loan application they must consider the amount of pre-existing debt service. In essence, they understand that the borrower must first pay for the loans they already have before they can pay for the new loan that they have requested. 3)They have created a requirement for the business owner to withdraw money from the new business to service the home mortgage during the crucial first months and years of their business, thereby endangering the business during its most vulnerable time.






What do you think about taking out a home equity loan to start a business?



We are not a sales company. Our mission at Phoenix Funding Source is to help you explore your funding options so you become comfortable when making a decision. We know your goal is to be a business owner and in order for you to feel comfortable in making your final decision, you have to feel comfortable with your funding option(s). We provide a very high level of customer service to ensure that the design, installation and administration of your new 401k plan is done correctly. For most of our clients, this process is largely unfamiliar. Because of that, we view our professional responsibility to our clients as one of our highest priorities.




When using retirement funds to invest in your business, you are rolling over funds from a current “qualified” retirement plan (401K from a previous employer or an IRA, cannot be a ROTH IRA or an inherited IRA) into another “qualified” retirement plan, YOUR company sponsored 401K, consequently, NO personal distribution is occurring.







What makes Phoenix Funding Source different?








No tax or penalty from the IRS?





A traditional form of funding that allows someone to qualify for $25K-$100K in non-secured funding. Quick and easy, your pre-approval amount is determined by your credit scores.


Obtaining the funding needed to start your business can seem like a daunting task. It isn't, with our help. We will guide you through the steps needed to ensure your business has the capital required to get off the ground, and stay off. One of the more common ways that start-ups and newer businesses are getting funding is through Unsecured Working Capital Lines of Credit. With our detailed knowledge of the banking industry, we can help you to start acquiring credit for your business within 7-10 days!

Funding amounts from $10,000 to $250,000!                                                                             Capital in hand with-in 10-14 days!



0% Introductory Rates                                                                                                                 No Obligation Consultations and Quick Funding



Based on Personal Credit Only!                                                                                                  Entity Establishment Available for Start Ups, Free of Charge!



Approvals as fast as 48 hours!

ULOC Process - Get Started Today!!!  


Step 1:  Check your 3 credit scores at; $1 trial membership that you will cancel within 7

             days. Our lenders require that we use this site because it provides an accurate business funding



Step 2:  Save your "FULL COMPLETE" report to a PDF file and email it to


Step 3:  We will pass your report on to our Unsecured Specialist who will review it and prep for underwriting.

              Within 1-2 business days, if you qualify, you will receive a pre-approval amount via email.


Step 4:  Schedule a time to speak with our Unsecured Specialist to review the program and help you feel

             comfortable with this funding option.


Step 5:  When ready, start the application process for funding.


WHY  Our lenders require that we send all candidates to this website to obtain most accurate scores.


WHY do you run your credit report?  If you run your credit report, it will not count as an "inquiry" and report negatively against your scores. Multiple inquires are not good for your scores.




Do you have a longstanding, positive relationship with a local bank? This may be an option but don't be discouraged if you are rejected. Rather than working with one (local) bank, we have resources for multiple lending sources, so give us a call to assist you with your funding needs.


Government backed secured loans are designed specifically for small businesses to help get their venture up and running quickly. We understand the qualifications needed to obtain SBA backed funding in this current economy.


At a glance...


           PERSONAL CASH INJECTION OF 20%-30%                                                                                                    REPAYMENT ABILITY


          COLLATERAL (UP TO 100% OF LOAN AMOUNT)                                                                                             INDUSTRY EXPERIENCE (2-5 YEARS)


          CREDIT SCORES (680+)                                                                                                                                     BUSINESS PLAN




We've heard all kinds of stories:


                 You can't be single = FALSE                                                                                              You must have a certain Net Worth = FALSE


                 You must have collateral = FALSE                                                                                    SBA Loans take 6 months = FALSE


                 You can't have a bankruptcy, short sale or foreclosure = FALSE                                      SBA Loans take longer than Conventional Loans = FALSE


                 You have to be employed = FALSE                                                                                   You must have experience in the same industry = FALSE


 If your local bank rejects you, don’t give up, contact us!