We designed the Solo 401k to be easy and (dare we say it?) fun to use. One aspect of running your own retirement plan is that you can take a tax-free loan from your Solo 401k.
Once you take the loan funds, you can use them for any purpose...including investing, paying off bills, or making a capital contribution to your business.
Keep in mind this is a participant loan, that means the funds come directly to you. Do not put 401k funds right into your business. Follow the steps below to create your participant loan paperwork on your Solo 401k dashboard, and then cut the check for the loan.
Step 1: Log Into your Solo 401k Dashboard
Step 2: Open the Loan screen
Step 3: Watch the helpful walk-thru video
Step 4: Complete the loan intake form
Enter your loan amount and loan term. Your SSN is already input for you. If your spouse participates in your Solo 401k, and this loan is for your spouse - enter their name as participant.
Step 5: Print and sign your loan documents
Sign and date as both the participant and plan administrator.
Step 6: Transfer funds
Move funds from your Solo 401k bank account to your personal account.
Do not transfer funds from the Solo 401k directly into your business bank account - remember, this is a personal loan from the 401k to you!
To start repaying your loan, simply transfer funds from your personal bank account back to your Solo 401k bank account. Again, do NOT transfer funds from your business bank account.
All loan repayments must come directly from your personally owned bank account.