We recently heard that one of the small business financing with retirement funds players discontinued their support of their self directed 401k/small business financing product. The reasons that we have heard are due to issues with the IRS and their ability to resolve differences or clarify issues.
This announcement has resulted in numerous calls from clients, and client prospects as to what this means for our mySOPTM product. Well the answer is business as usual. We have not been contacted by the IRS regarding our mySOPTM product. We were not one of the original nine companies identified in the ROBS memo. The NAFEP mySOPTM product is setup in a very safe, compliant manner and to date none of our plans have been challenged. The recent demise of one of competitors at the hands of the IRS has nothing to do with the legality of the mySOPTM concept and has everything to do with how the plans were promoted, consulted, setup and operated. This is clearly an issue with the provider and has nothing to do with our mySOPTM.
NAFEP and American Estate & Trust continues to be a leader in providing self directed retirement solutions for non-traditional investing and business or franchise financing. We always remain vigilant and watchful for changes in the tax laws so as to ensure that our clients receive a safe and compliant product.
In today's tight credit markets, and flagging econonomy, the ability to leverage retirement funds to start a small business remains one of the only ways to get started. Everyday we receive calls from prospective clients who have lost their job, and their only hope for replacing their income is by starting a business. Most of these people leave their employers with little personal cash saved, but with substantial amounts in their retirement accounts. Given the choices, tapping those retirement funds to get the business started may be the best investment they ever make with their retirement.
