How to Use Private Lending in a Self-Directed IRA or Retirement Plan

If you’re like most high earners, you’ve worked hard to build up your retirement savings. But after years of putting money into the same stock-heavy portfolio, you’re starting to wonder:
Is there a smarter, more stable way to grow this capital—without riding every market swing?

There is. And it starts with looking beyond the traditional playbook.

At LBC Capital Income Fund, LLC, we work with investors who want to earn reliable income, protect their principal, and keep more of what they earn—especially inside tax-advantaged accounts. One of the most effective ways to do that is by investing in private lending through a self-directed IRA.

If you haven’t explored this option yet, here’s what you need to know—along with why real estate debt in an IRA may be the low-drama, high-impact investment you’ve been looking for.

What Is a Self-Directed IRA?

A self-directed IRA (SDIRA) works just like a traditional or Roth IRA when it comes to tax treatment. The difference? You’re not limited to stocks, bonds, and mutual funds.

With an SDIRA, you can invest in:

• Real estate
• Private equity
• Precious metals
• Notes and debt
• Private lending funds like LBC Capital Income Fund, LLC

It gives you more flexibility to invest in assets you understand—and more ways to protect and grow your retirement money beyond the public markets.

Why Investors Use SDIRAs for Private Lending

Let’s talk about why this strategy is growing fast, especially among high-income professionals and early retirees.

✅ 1. Keep More of What You Earn

When you invest in private lending through an SDIRA, the interest income is either tax-deferred (Traditional IRA) or tax-free (Roth IRA). That means:

• No income tax on your monthly payouts
• No capital gains tax when the fund performs
• More of your return stays in your account, compounding year after year

✅ 2. Monthly Passive Income

Private lending generates steady cash flow, often paid monthly. That income stays inside your IRA and can be reinvested or kept as dry powder for your next move. Either way, your money’s working while you’re not.

✅ 3. Less Market Drama

Private lending isn’t tied to the S&P, interest rate rumors, or investor sentiment. That makes it a great option for diversifying your retirement plan, reducing volatility, and sleeping better at night.

✅ 4. Backed by Real Assets

LBC Capital Income Fund, LLC only funds loans backed by real estate, with conservative loan-to-value ratios and first-lien security. If a borrower defaults, we have the legal right to recover the property and protect investor capital.

It’s not theoretical—it’s structured.

How It Actually Works

The process of using a self-directed IRA for private lending is more straightforward than you might expect:

1. Open an SDIRA

You’ll work with a custodian that specializes in self-directed accounts (like Entrust, STRATA, or Equity Trust). They handle the setup, compliance, and tax reporting.

2. Move Funds

You can transfer or roll over money from an existing IRA or 401(k)—without triggering taxes or penalties. The custodian will guide you through the paperwork.

3. Choose Your Investment

You direct the custodian to invest in a private lending fund like LBC Capital Income Fund, LLC. We’ll provide you with all required documents and answer any questions about the structure.

4. Earn Monthly Income

Your SDIRA earns monthly interest income, which stays in the account. You can reinvest or hold it—either way, it grows tax-deferred or tax-free.

Rules to Know Before You Invest

The IRS has some clear boundaries around how you use your SDIRA. The good news? As long as you follow them, investing in private debt is completely allowed.

Here’s what you can’t do:

• Lend to yourself or family members
• Personally benefit from an IRA investment (e.g. stay in a rental you own through your IRA)
• Mix personal and IRA funds in the same deal
• Personally guarantee any IRA investment

These are called prohibited transactions, and your IRA custodian will help you stay compliant. As long as your investments are arm’s length and the paperwork is done right, you’re good to go.

Why Not Just Buy Rental Property in My IRA?

A common question. Yes, you can buy property inside an SDIRA. But it comes with complexity:

• You can’t use or manage the property yourself
• All expenses must be paid from the IRA
• All income must stay inside the IRA
• Managing tenants, repairs, and compliance gets messy fast

Private lending is different. With LBC Capital Income Fund, LLC:

• You earn income backed by real estate
• You don’t manage anything
• You don’t deal with tenants, contractors, or late-night calls
• You don’t chase payments—we handle everything

It’s a cleaner, more hands-off way to get real estate exposure inside your retirement plan.

Why LBC Capital Income Fund, LLC Fits Well in a Retirement Strategy

Our fund is built around income, structure, and downside protection—all things that make it a great match for SDIRA investors. Here’s what you get:

• ✅ First-lien loans only
• ✅ Monthly distributions
• ✅ Conservative loan-to-value ratios
• ✅ Short loan terms = better liquidity
• ✅ Real estate collateral you can verify
• ✅ No speculation, no crypto, no volatility

We’ve helped many investors use self-directed IRAs to build a steady income stream for retirement—without adding work or complexity to their lives.

Grow Your Retirement. Don’t Just Park It.

If your IRA is sitting in mutual funds or riding the rollercoaster of the stock market, it might be time for something more grounded.

With private lending in a self-directed IRA, you’re not chasing returns. You’re earning income, preserving capital, and using the same tax advantages—just with a strategy that actually fits your risk profile.

At LBC Capital Income Fund, LLC, we believe your retirement money should do what you’ve done your whole career: work hard, perform well, and avoid drama.

Want help getting started with private lending in your SDIRA?
We’ll walk you through the process, introduce you to a custodian, and help you put your capital to work—without the stress. Reach out.