To my knowledge a loan does not require a hardship case at all. Its just when you pull the money out, thats when you need proof of hardship, I believe there was 4 reasons, tooner listed 2, the other 2 were termination and bad health,(you or your family), death. If you didnt fall under the big 4, you would get the penalty.
All information on hardship withdraws and loans are clearly listed on the teamster 401 site. Remember any hardship withdraw is subject to 20 percent tax penalty and I believe another 10 percent if you are under age 55. Basically you lose 30 percent of your holdings.
Loans are at calculated at 9 percent interest rates. Bottom line is that you are paying that interest on your own money.
The system is designed to keep the money in their trust. What is scary is that the rules could change quicker that the central states did, what happens if the feds decide to charge additional tax burdens or raise the age requirement to 65 instead of the current 59 1/2.
You can also opt to have a portion of your 401K deductions applied "after tax". It can be withdrawn at any time for any reason. I personally put in 1% as a rainy day fund. Hopefully it will all still be there when I retire.
Many 401(k) plans allow employees to make a hardship withdrawal because of immediate and heavy financial needs. Generally, hardship distributions from a 401(k) plan are limited to the amount of the employee's elective deferrals only, and do not include any income earned on the deferred amounts.