Many people are not aware that IRA's can be used to fund businesses. Most people think that IRA's are only to be set up within mutual funds, but there are only a few kinds of investments that the IRS does not allow IRA's to be used for: life insurance, and some collectibles.
According to SmartMoney, you can use IRA's to fund:*Stock from an initial public offering
*Closely held stock
*Real estate
*Options to buy real estate
*Oil and gas royalty interests
*Stock options
*Mortgages or other loans to be held for investment.
*Or set up your own "mutual fund"
The way you do this is to get a trustee (a brokerage firm or bank) to help you structure the IRA, so it meets IRS-qualifications. This is called a "self-directed" IRA.
Here is an article from NuInvestor which discusses using real-estate purchase IRA's as leverage.
Of course, the wisdom of putting your retirement savings into a risky venture is another question entirely. That's why most IRA's are set up within mutual funds, which at least have some track record of past returns. I'm not an investment advisor, but I would think carefully before investing my retirement into a business. A self-directed IRA set up to provide business funding might be an option if you have other income sources for retirement.
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