In a Nutshell: Entrepreneurs must make a variety of crucial decisions when launching a new business. And for many small business owners, determining how to fund a new venture is one of the most challenging and important determinations to make. Guidant Financial focuses on helping small businesses secure the funding type that makes the most sense for the business. The company facilitates 401(k) funding ventures, Small Business Administration loans, and unsecured loans. Guidant Financial also offers a suite of other business services to help funded businesses grow and thrive.
Small businesses can face numerous challenges when they are just getting off the ground. For many of them, funding is one of the biggest hurdles to overcome. While some businesses may partner with investors, others explore funding opportunities via financial institutions.
But many small business owners don’t have the financial expertise to secure funding to see their business flourish. Even entrepreneurs who are savvy in the ways of funding don’t always have the time to explore multiple avenues.
Thankfully, companies like Guidant Financial are there to help guide small business owners through the funding process.
The company facilitates a number of funding options for businesses, including traditional small business loans and the lesser known strategy of funding via a 401(k).
“Our staff is made up of experts who help people finance small businesses and franchises through a full suite of funding solutions, which include SBA loans; unsecured loans; portfolio loans; and equipment leasing, plus 401(k) business financing (also known as Rollovers for Business Start-ups or ROBS),” according to the company. “In fact, we structure more ROBS arrangements each year than any other provider in the space and boast a spotless IRS track record.”
We recently spoke with Guidant Financial Co-Founder and CEO David Nilssen to learn more about the company’s background and how it helps businesses secure funding and resources to help companies grow.
401(k) Business Financing Allows People to Tap Into Retirement Funds to Start or Buy a Business
Nilssen told us that in the early 2000s, he was speaking with his future Guidant Co-Founder Jeremy Ames about a real estate deal when Ames suggested funding it via self-directed IRAs. Nilssen hadn’t heard of this funding option before, and it piqued his interest.
“The more I looked at it, the more I realized this is something that’s been around for quite some time, but for the most part, had been preserved for the mass affluent,” Nilssen said. “There were people that had advisors helping them to invest in non-standard assets, but it wasn’t really available to the mainstream American investor or business owner. We decided that there was a need to do that, and we took that to the mass market.”
It wasn’t long before Nilssen and Ames decided to go into business together and launch Guidant Financial. Nilssen said the company’s initial focus was on funding real estate ventures, but it soon switched gears to focus on helping small businesses gain funding via the 401(k) strategy.
“We went all-in on small business,” Nilssen said. “The 401k strategy is one of the many ways we help entrepreneurs to finance businesses. And we provide services to make sure they’ve got a leg up in terms of being successful in the long term and help them to manage the back office portions as well.”
401(k) business financing provides a solid funding source for many aspiring entrepreneurs.
“Local banks decline 80% of aspiring small business owners for loans,” according to Guidant Financial. “Few people have enough money on-hand to start or buy a business or franchise outright. Why struggle with these barriers when you have the money to invest in yourself?”
Nilssen said he believes this is an important strategy for business owners.
“It’s a very popular way for people to finance a small business because they are taking on the business with equity and not debt,” he said. “From the very beginning, cash flow is so important. So if, instead of spending that money that you’re initially generating from new customers and being able to reinvest that in the business, as opposed to sending it to a bank in the form of interest payments, it’s a real advantage.”
This approach allows entrepreneurs to draw money from their own retirement accounts to start or buy a business without incurring early withdrawal fees or tax penalties.
“This is not a loan; ROBS just gives you access to your own money, so that you can build the life you want without going into debt,” according to Guidant Financial.
Facilitating Rollover Funding and Small Business Loans
“Funding a small business is hard. Many lenders require six months to a year of revenue history in order to fund a business,” according to Guidant Financial. “We specialize in helping you find the right financing from the start for your small business or franchise. Our products and solutions have helped launch over 25,000 small businesses.”
Nilssen said the company is essentially a consultant in the funding transaction.
Guidant Financial can help entrepreneurs determine the best funding approach to their small businesses, including 401(k) funding, Small Business Administration loans, unsecured loans, or perhaps other strategies.
“Small Business Administration (SBA) loans offer big benefits like low-interest rates, long repayment terms, and no ballooning costs,” according to the company. “We make it easy for qualified borrowers to get an SBA loan. You’ll reach our extensive network of lenders with one application – and get the perfect fit with a competitive advantage.”
And unsecured loans offer the opportunity for fast funding with no collateral required for many small businesses with good credit. These loans are also much faster and easier to apply for compared to many other business loans. And most unsecured loans close in three weeks or less, according to Guidant Financial.
Nilssen said that, with unsecured loans, Guidant Financial serves in a kind of broker role.
“We take the application, we help package it up, and then we go find the lending sources that want to consume those types of loans,” he said. “We become a matchmaker in the sense for those people.”
A Suite of Services to Help Small Businesses Grow After Funding is Secured
Guidant Financial goes beyond facilitating funding. The company also helps businesses handle many of the other functions necessary to grow and thrive.
“We’re more than just financing. We’re with you for the life of your business,” according to the company. “That’s why we offer ongoing services that help your small business maintain and grow long after you’ve gotten funded.”
Nilssen said this includes accounting, tax, and payroll services, timekeeping, investment management, HR services, and 401(k) administration.
“These business owners have to make so many decisions in a very short period of time. Our whole goal is that we want to make it easy for them to go into business with best-in-class service providers who are also providing great value for them so they can focus on building their business,” he said.
And many of these services work hand in hand with one another.
“Guidant HR compliments our payroll and 401(k) plan administration services,” according to the company website. “With Guidant HR, you don’t have to worry about staying in compliance — our robust resources, on-demand support, and expert HR professionals have your back.”
Similarly, Guidant Financial’s bookkeeping services provide business owners with peace of mind.
“Our experienced CPA partners help you save time and effort while effectively managing your business finances,” according to the company. “If you’re the DIY type, our partner relationships mean we can offer discounted software to keep you organized.”
The company also boasts the lowest IRS audit rate in the industry, according to the Guidant Financial website.
“Thanks to our award-winning Legal team, no Guidant client has ever experienced adverse IRS outcomes when following our plan,” according to Guidant Financial.
Looking at the Next Wave of Entrepreneurs
Nilssen said that following the COVID-19 pandemic, the company has seen many seasoned entrepreneurs who are personally and financially fatigued. This has led to a number of owners deciding it’s time to exit their business.
“I think that creates a really cool opportunity for that next wave of entrepreneurs to come in and think about reinventing those businesses and revitalizing the communities that are a bit quieter now,” he said. “ I think there are some really cool opportunities on the horizon.”