The most popular way to fund a business, be it a franchise or a business opportunity, under $200,000 is by using what’s called a rollover for a business start-up (ROBS). It’s just a like a 401k, except instead of investing in a company on the stock exchange, you’re investing in yourself and your business.
This isn’t the same as borrowing against your 401k, and hence, there are fewer (or no) penalties or limitations. Instead, you’re investing your 401k assets in yourself and your own business.
We ran a guest post from a company that provides this service late last year called Guidant Financial.