Glossary · Your money in the deal
Self-directed IRA
In short
An Individual Retirement Account that allows you to invest in a wider range of assets, including private businesses, beyond typical stocks and bonds. It's a way to use retirement funds for your equity injection.
What it means in a deal
With a Self-directed IRA, you can directly invest a portion of your retirement funds into your new business, acting as part of your equity injection. This approach requires careful compliance with IRS regulations to avoid prohibited transactions and potential penalties. It's distinct from a ROBS plan.
Related terms
Common questions about Self-directed IRA
- How does a lender verify equity injection from a Self-Directed IRA (SDIRA) structured as a loan to the business?
- Can I use funds from a Self-Directed IRA (SDIRA) for my equity injection if structured as a loan to the business?
- Can a buyer use funds from a Self-Directed IRA (SDIRA) for their equity injection if structured as a loan to the business?
- Can 401(k) or IRA funds be used for my SBA 7(a) loan down payment?
- Can I use funds from a Roth IRA or 401(k) without penalty for my equity injection?
- Can I use retirement funds from my IRA or 401k for an SBA 7(a) equity injection?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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