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Self-Invested Can your retirement savings help solve your financing problems?

By Sara Wilson

Opinions expressed by Entrepreneur contributors are their own.

Gaining access to startup capital is often a huge hurdle. Nowmany entrepreneurs are turning to companies like BeneTrends Inc.,Directed Equity and Equity Trust Co. to get early access toretirement savings--without the normal penalties.

How does it work? Len Fischer, founder of San Diego-basedBeneTrends, explains his company's four-step process. First, aC corporation is established for the new business, and a retirementplan is then created under the new C corporation. Next, funds arerolled over from the person's existing retirement plan into theC corporation's new retirement plan. Finally, the newretirement plan purchases stock in the C corporation, leaving thecapital in the business owner's hands. This process takes abouttwo to four weeks and costs $4,800 plus state filing fees.

Don Patrick, managing director of Integrated Financial Group, afinancial planning firm in
Atlanta, offers the following advice to avoid potential problemswith this type of financing:

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