Firms such as BeneTrends in North Wales, Pa & Guidant Financial Group in Bellevue, Wash. are observing almost 30% to 35% increase in customer volume for a new venture funding approach that taps into the entrepreneur's 401K for a charge. In this non-traditional mechanism for small business loan an entrepreneur creates a corporation with the help of an outside advisor. The corporation in turn starts a 401K plan and the entrepreneur rolls over existing retirement funds into the account. According to the 401K rules, such investiments (as against withdrawals) are permissible and are not subject to the 10% penalty. Firms such as BeneTrends and Guidant charge $4,500 to $7,500 for their services.
Source: Burnsed, Brian, "From 401(K) Nest Egg to Seed Money," Business Week, December 22, 2008, pp. 64