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🔑 Can You Borrow From a SEP IRA or Solo 401k?
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I keep a chunk of my retirement savings in a SEP IRA. If I hit a cash-flow crunch in my business, can I borrow against those funds?
A SEP IRA cannot legally offer participant loans under any circumstances. The IRS prohibits any IRA — including a SEP IRA — from extending a loan or line of credit to its owner. The funds are locked until distribution age, with no exception for business emergencies.
A Solo 401(k) that includes loan provisions operates under entirely different rules. Plan participants may borrow up to 50% of the account balance, capped at $50,000, tax-free and penalty-free, repaid over a five-year term at a market-based interest rate.
👉 Full breakdown: SEP IRA vs Solo 401k loan rules for self-employed owners
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