IRA FAQs - Loans
Can I roll over the outstanding loan balance from my retirement plan into an IRA?
IRAs (including SEP-IRAs) do not permit loans. If this transaction was attempted, the the IRA could be disqualified.
The bank refuses to give a loan from my SEP - isn't it required to allow loans?
Your account in a SEP, SIMPLE IRA or SARSEP plan is an IRA, and no type of IRA can permit loans.