World Class Mergers & Acquisitions  |  For Companies $5 Million to $100 Million in Revenue

Accessing Retirement Savings Plans to Fund a Business Acquisition

Many prospective business buyers, who may be very sophisticated in other aspects of acquiring a business, are unaware that in certain circumstances they may use some or all of their IRA, 401k, 403b, or other tax-favored retirement savings accounts to help finance their business acquisition — without incurring income tax or early withdrawal penalties.

There are several steps in the process that all need to be carefully orchestrated, and several firms have emerged that specialize in helping prospective buyers successfully complete this task without fear of owing tax or penalties.

For many buyers, this can free up 100’s of thousands of dollars which can be used to supplement the cash down payment, provide needed working capital, fund necessary improvements, etc.  In some cases these additional funds enable a buyer to afford a larger business, or include the purchase of commercial real estate as part of the overall acquisition of the business.

Whether or not this is a wise personal decision for a specific buyer depends upon many factors, and shouldn’t be undertaken without consulting your personal financial advisor and thoroughly considering all the risks and alternatives.

If you know of someone who’s thinking of buying a business, or of a business owner who’s thinking of selling a business and who might benefit from a complimentary consultation with us, have them contact me, or any of the M&A professionals at The Bradway Group (

By: Mike Ertel, Transworld M&A Advisors