I'm currently looking at a business that I want to purchase. I have approximately $40k in an E-trade account. I know that if I withdraw this money I will be charged a %. Can you please tell me what I can expect between penalties and taxes? Also what if I invest in a business with it?

Using there money to invest in a business would not be considered a hardships so you will lose 4K in penalities and addition the $40K will be added to your taxable income. This could push you into a higher bracket. But it wll most likelt mean another $10K in taxes. So your $40K gets you around $25K.