Self-Directed IRA – Business Lending – With One

Do you know a number of experienced, successful business owner with a solid business model and his or her feet on the ground? Do you want you get an above-market return on your Self-Directed IRA assets?

If you aren’t planning on needing the money for a while – and if you can handle the usual risks that accompany lending to small enterprises, then business lending using your Self-Directed IRA may be a terrific option for you.

Almost all of us know small business owners who occasionally need cash. Here are some situations where you may be able to help the business owner – and generate a competitive return for your money.

  • A successful pizzeria owner wants to open another restaurant.
  • A local roofing contractor needs to purchase another truck and equipment for another roofing crew to meet established demand.
  • An industry expert is looking to start a brand new business and needs a financing partner
  • A proven manager is looking to purchase a business.
  • A successful restaurant owner wants to purchase the building his or her restaurant is in.
  • A caterer needs to upgrade his or her kitchen or buy a refrigerator truck.
  • An established business is experiencing greater success now and wants to pay off higher interest loans they took out as a start-up.
  • A business owner wants to buy out his or her partners or buy back stock.
  • A local manufacturer or contractor needs to make payroll pending getting paid on completion of in-progress projects.
  • A construction company needs cash to complete construction on a building.

Many times, small business owners have trouble getting financing from traditional lenders. They may simply not know how to underwrite the loan, or it doesn’t conform to their standard assumptions and they don’t know how to price it. Or there may be an equity piece to the deal – for example, rather than foreclosing on a piece of collateral that may not be worth very much to you compared to what it’s worth to the business (what are you going to do with that roofing truck?), you may strike a deal to agree in advance to exchange the debt for stock in the company at a price or valuation agreed to in advance.


You control rates. You can set your own interest rates based on your own assessment of the risk of lending. You may find an opportunity that banks and traditional lenders rate as very risky on paper, but when you do your own due diligence you may find that the loan is really quite secure.

Tax advantages. You get to maintain tax deferral. Interest payments coming into a Self-Directed IRA are not taxable until you take them out. And they aren’t taxable at all if you use a Roth IRA.

Wealth protection. Your assets receive federal and state protection against creditors, in most instances.

You control terms. You can structure the terms according to your own needs. For example, while treasuries pay interest every six months, you can create a loan package for a small business that matches your income needs more closely. For example, they can pay principal and interest every two weeks, or every quarter. Or you can create a “zero coupon,” essentially with a one-time lump sum. This may work great when you have a construction project that is due to complete shortly before you expect to need the cash from your Self-Directed IRA.

Diversification. Your Self-Directed IRA small business loan portfolio is unlikely to be highly correlated with the stock market or even the overall bond market.

The hometown advantage. Small-business lending allows you to invest capital and create jobs and opportunities right in your own community. This allows you to keep closer tabs on your money. It can also be a tremendous source of personal satisfaction to see what your assets are creating right in your own hometown.

If this kind of investing appeals to you, we want to work with you. American IRA, LLC is an expert at handling transactions and supporting people who own Self-Directed IRAs. A lucrative portfolio of private business loans generating above-market returns for risk-tolerant investors is very possible. In fact, we have a number of clients doing precisely that.

For more information, or to arrange a no-obligation consultation, call us at 866-7500-472(IRA), or visit us on the Web at