Traditional IRA
A qualifying self-directed Traditional IRA may be able to hold a private note when the custodian permits the investment and the transaction complies with applicable retirement-account rules.
Retirement-Account Private Lending
Use a Self-Directed IRA to Explore Liquor License Lending
Some self-directed IRA custodians permit private-debt investments. In an eligible, properly structured transaction, a Traditional or Roth IRA may hold a loan made to an unrelated third-party borrower who is purchasing or refinancing a transferable Florida 4COP Quota or 3PS quota liquor license. Interest and principal payments are directed back to the IRA account rather than paid personally to the IRA owner.
The Basic Structure
The IRA is the investor — not the IRA owner personally
Roth IRA
A qualifying self-directed Roth IRA may also be able to hold private debt. Tax treatment depends on the account and the investor’s circumstances; FLLM does not provide tax advice.
Third-party borrower
The borrower should be an unrelated party who is not a disqualified person with respect to the IRA. The transaction must be evaluated for direct and indirect prohibited-transaction concerns.
Interest returns to the IRA
Loan payments are generally directed to the retirement account through the custodian or administrator. The IRA owner should not personally receive the borrower’s interest or principal payments.
Optional Administrative Service
Self-Directed IRA Setup Assistance
Want help getting a self-directed IRA administratively ready? FLLM offers a flat-fee concierge service that helps organize the paperwork and follow-up required by the custodian you select. The IRA itself is established and held by the customer’s chosen IRA custodian or trustee — not by FLLM.
Administrative setup & transfer coordination
We help keep the process organized while you remain in control of the custodian, account elections, signatures and investment decisions.
- Organize the account-opening materials required by your selected self-directed IRA custodian or administrator.
- Help assemble factual information and supporting documents requested by the custodian, using information supplied or approved by you.
- Help coordinate the custodian’s transfer or rollover paperwork with your existing IRA provider or retirement-plan administrator.
- Track administrative follow-up, missing items and status updates while the new account is being opened and funded.
- Prepare an administrative checklist for a future private-lending investment request once the account is established.
Administrative scope only. FLLM does not select your custodian, recommend whether you should make a rollover, transfer or Roth conversion, choose tax elections, draft customized legal or loan documents, provide legal, tax or investment advice, handle retirement funds, sign forms for you, determine prohibited-transaction compliance, or guarantee that a custodian will accept a proposed investment. You review and approve all elections and sign all required documents. Any actual movement of retirement assets is handled by the existing plan or IRA provider and the receiving custodian or trustee under their procedures.
How a Transaction Could Work
From opportunity to IRA-owned private loan
- Identify an unrelated borrower and transaction. The borrower may be buying or refinancing a Florida 4COP Quota or 3PS quota liquor license.
- Review the license and loan economics. Investors should evaluate county-specific license value, requested loan amount, borrower equity, repayment capacity, liens, transaction timing and exit strategy.
- Confirm custodian eligibility before committing funds. The IRA custodian or administrator must be willing to hold the proposed private-debt investment and complete its own documentation and review process.
- Complete prohibited-transaction review. The IRA owner should have qualified tax or legal professionals determine whether the borrower, related parties or transaction structure creates a prohibited transaction.
- Document and fund through the IRA. If approved, the retirement account — not the IRA owner personally — funds the loan, and the note and related documents are titled for the IRA in the form required by the custodian.
- Direct payments back to the IRA. Principal and interest are paid to the IRA account according to the loan documents and custodian procedures.
License-Backed Loan Documents
How a “chattel mortgage” can fit into a Florida quota-license loan
The note creates the debt; the security agreement identifies the collateral.
A private loan may include a promissory note and a separate security agreement—sometimes traditionally titled a chattel mortgage—that identifies the quota license as collateral and states the borrower's covenants and the lender's contractual remedies. The agreement may restrict an unauthorized sale, assignment, lease, additional lien, or other disposition while the loan remains outstanding.
A Florida quota liquor license is a regulated general intangible, not ordinary physical chattel. The agreement does not give the IRA owner or custodian a right to operate under the license, and signing it does not by itself prove that the lender's interest was recorded or perfected.
Important IRS Rules
This is not the same as taking a loan from your IRA
- The IRS states that participant loans are not permitted from IRAs or IRA-based plans.
- Borrowing money from your own IRA can be a prohibited transaction.
- Using IRA assets as security for your personal loan can create adverse tax consequences.
- Lending money or extending credit between a plan or IRA and a disqualified person can be prohibited.
- Direct or indirect use of IRA assets for the benefit of a disqualified person can create prohibited-transaction risk.
- Nonpublicly traded or directly controlled assets can carry increased prohibited-transaction risk and require careful administration.
Illustrative Example
A retirement account funds an unrelated buyer’s license purchase
Example only — not an offer or promised return
An unrelated buyer agrees to purchase a transferable Florida quota liquor license and seeks private financing for part of the acquisition. An investor with a self-directed IRA identifies the opportunity, completes independent underwriting and confirms with the IRA custodian and professional advisers that the investment is eligible. If approved, the IRA funds the loan and holds the investment through the custodian. The borrower makes scheduled principal and interest payments back to the IRA under the loan documents. Any collateral package, guarantees, lien rights, perfection steps and enforcement remedies must be documented for the specific transaction and applicable law.
Investor Due Diligence
Private lending can produce income — and can also lose money
- Verify the exact license, county, status, transferability and market value.
- Review borrower credit, liquidity, equity and repayment capacity.
- Understand whether the loan is secured and what remedies are actually available after default.
- Review existing liens, senior debt and any competing claims.
- Confirm the interest rate, maturity, amortization, balloon terms, fees and prepayment provisions.
- Use independent legal, tax and retirement-account professionals before funding.
Important: FLLM is an information and marketplace platform. FLLM is not an IRA custodian or trustee, investment adviser, broker-dealer, tax adviser or law firm. FLLM does not guarantee that any proposed transaction qualifies for IRA investment treatment, does not guarantee repayment or return, and does not determine whether a transaction is a prohibited transaction. Investors and borrowers should obtain independent professional advice before entering any transaction.
Explore Private Lending
Review opportunities — or get help organizing your IRA setup.
Evaluate the license, borrower, collateral structure, loan terms and retirement-account eligibility before committing capital.