I`ve seen business owners set up a Solo(k) Plan under their business tax ID. Then they make a direct rollover of all old 401(k)`s and pensions (plus all other IRA`s if you want) into this new Solo(k). Once all the assets are consolidated this way, and if the Solo(k) Plan they establish permits, they may borrow as an individual up to $50,000 or 50% of the account balance, which ever is less. The rules to avoid the Solo(k) loan from being taxable require they repay all of the loan within five years; that they make repayments at least quarterly using level amortization (i.e. no balloon payments at the end); and they must charge themselves a reasonable rate of interest. They also need a promissory note that meets IRS standards before the loan is disbursed.
This Solo(k) method helps cash-flow in that you can retain every needed dollar in the company. You`re not draining cash from the company as a salary to meet your personal expenses because you`ve got the loan proceeeds in your personal checking account to pay your bills.
David M. Hembree, QPA