Turn your self-directed IRA into a lending institution with private lending investments. This type of investment strategy gives you the freedom and flexibility to lend money from your IRA to individuals and corporations (via promissory notes), with the ability to earn interest on private loans.
Control your repayment terms, interest rates, and more.
Earn tax-free or tax-deferred income in your self-directed IRA.
Help support your community initiatives with investment lending.
Think of private lending like a bank: Your IRA acts as the lending institution, with businesses and consumers acting as the account holders. People in need of a loan or financing would borrow money from your SDIRA. That means you could lend to a neighbor who wants to open an animal rescue or to a business that’s looking to expand.
As a lender, you have the power to make final decisions on the terms, rates, and whether or not it’s secured. With private investor loans, you’ll make money by the interest paid on the loan.
Beware of prohibited transaction rules that disallow lending to certain family members or any persons deemed a Fiduciary to your IRA.
This strategy can involve different types of borrowers and investment options, depending on what you’re looking for. These are the most common types of lending.
Choose a qualified borrower for the loan (not a family member of any type or a fiduciary.)
Set the terms of the loan, including if it’s secured or unsecured, down payment, and interest rate.
Mainstar Trust will execute the loan on behalf of your SDIRA.
All borrower payments, including interest, go directly into your Mainstar Trust account.
Investors are encouraged to do adequate research or contact a broker/financial advisor, attorney or CPA to determine if private lending is an appropriate investment.
Once you have determined that private lending is suitable for you, a specific note can be purchased with your Self-Directed IRA or another retirement account at Mainstar Trust. Click here to discover how to use a Mainstar Trust account to invest in a private lending product.