The Small Business 401K Loan

From Small Business Week comes an article on using your 401K without penalty to get a loan for your small business. Here is a snippet from the article on how the process works:

"Here's how it works. An entrepreneur, aided by the outside adviser, creates a corporation. The newly formed entity starts a 401(k) plan, and an individual rolls over existing retirement funds into the account. Under 401(k) rules, the plan can purchase shares in the corporation—money that can be plowed into a small business that sells a product or service. Those deals are considered investments, which is the key. By investing the money rather than withdrawing it, entrepreneurs avoid triggering a penalty that amounts to 10% of the assets."

Be sure to read the full article here.