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401K Financing and Securities-Based Financing for Individuals with Bad Credit

We’ve gone through Revenue-Based Lending and Merchant Cash Advances, but that may not be the right type of business loans for you.

Maybe you have a 401K or a Security Based Asset? See how you can use both to obtain a business loan.

401K Financing

If you have a 401K, you may qualify for 401K financing. This is financing that you can obtain where you use your 401K as collateral. You can borrow as much as 100% of the value of your 401K and in some cases up to 200%. And approvals are not based off of your personal credit or cash flow.

With 401K financing you can save thousands of dollars in interest and fees plus protect your personal credit. With 401K financing, you can obtain business financing for up to 200% of the value of what is in your 401K. This can help to lower your business’s overhead while aggressively growing your retirement account at the same time. You can literally leverage your 401K to expand your business.

Don’t confuse 401K financing with borrowing from your 401K through your company’s HR department. The IRS allows you to borrow up to half of your 401K’s value not to exceed $50K in any given year. That amount must be paid back at the prime rate with every paycheck. Many people use this as an excellent option to get some quick cash. 

The 401K financing strategy is approved by the IRS, which means there’s no tax penalties when you get funded. Interest rates are usually under 5%. And best of all, you keep your 401K money where it is, invested and continuing to earn interest, all while you still get a 401K financing loan. No other collateral or any cash flow is required for approval. 

This program works great for startup businesses that find it difficult to qualify for business loans due to a lack of time in business. And even if you don’t have a 401K, you might have family members, friends, partners, or other investors who may want to supply their 401K as collateral in exchange for equity in your business. 

This is a great low-rate, low payment, funding option that you can obtain for your small business without a personal credit check or monthly revenue that is perfect for helping you as well as others safely invest in your company.

REQUIRED TO QUALIFY: 401K with a value of $10,000+

LOAN AMOUNTS: $10,000 – $1,000,000

Securities-Based Financing

Securities-Based Loans are a great option for many business owners with limited or undocumented income. This program is very similar to 401k financing. 

With securities-based financing you can acquire financing for up to 90% of the value of your stocks or bonds with rates as low as 5%. Your stocks are used as collateral; however, you still earn interest on your investments because you still retain ownership of your stocks or bonds in your name. And you keep 100% of your stock’s or bond’s appreciation.

There are no personal credit checks, no tax penalties, no pre-payment penalties or other collateral or cash flow requirements for qualification. As long as your stocks or bonds qualify, you can get a securities-based loan, even as a startup business. Fortunately, most stocks and bonds are accepted for this program.

Securities Based Loans are non-recourse and non-recorded loans where the borrower retains full beneficial interest. Non-recourse means the lender cannot come after you personally in the event of non-payment. 

Securities-based lending generally involves a revolving line of credit that is secured by your eligible investment portfolio as collateral. At the end of Securities Based loan periods, the borrower receives back the same number of shares originally pledged as collateral. Securities-Based Loans funds may be used for virtually any purpose that you can think of to build and grow your business. This is a wonderful way for you or even for others to invest in your business. 

REQUIRED TO QUALIFY: Stocks or bonds with a value of $10,000+

LOAN AMOUNTS: $10,000 – $1,000,000

We’d love to help you grow cashflow for you business, and establish business credit, even without your SSN, this year. Schedule a time with us today at: calendly.com/bizcred/consult

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