Using Your 401(k) to Buy a Small Business

401k to Buy Business

Last week’s post at Transaction, my New York Times blog, looked at an increasingly popular way to finance the purchase of a small business: rolling over funds from your 401(k). Business brokers see buyers use this financing alternative all the time yet it is still a relatively little-known option, even within the financial services community.

Why buy an existing business?


One of my first posts at the New York Times was titled “Buying a Business Instead of Starting One.” I illustrated the reasons for buying an existing business by telling the story of a business owner named Sam. At the end of the post, Sam is revealed to be none other than Sam Walton — founder of Walmart Stores, Inc. — who bought a Ben Franklin variety store in 1945 and turned it into the world’s largest retailer.