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ROBS Solution

Invest in yourself

Use your retirement funds to legally invest in a new or existing business.

ROBS Solution

How it works

Rollover Business Solutions

1. Establish a C Corp.

Establish a new C Corporation in the state the business will be operating. It must be a C corporation.

Can I use my retirement to start a business

2. The C Corp. adopts a 401(k)

The C Corporation adopts a prototype 401(k) plan, letting participants direct their plans’ investments, including employer stock or “qualifying employer securities.”

Can I use my retirement to start a business?

3. Participate in the 401(k)

You elect to participate in the new 401(k) plan, then direct a rollover of a prior employer’s 401(k) plan funds into the newly adopted plan.

Use my retirement to start a business

4. Purchase stock

Using your 401(k), purchase the C Corporation’s newly issued stock at fair market value.

Solo 401(k)

5. The C Corp. purchases assets

The C Corporation uses the proceeds from the sale of stock to purchase the assets for the new business.

ROBS IRA

6. Earn a salary

Now you can earn a salary from the revenue of the business and personally guarantee any business loan.

Manage my retirement
 

IRA Financial will help you create a fully compliant structure.

Due to IRS concerns over misuse of the structure, it’s crucial to work with a knowledgeable provider that will create a structure that is fully compliant with IRS and ERISA rules.

SBA Loan for ROBS

How can you put your ROBS to work for you and your business goals? The SBA Loan for ROBS offers low interest funding for your business.

Program Highlights

  • Quick loan decisions
  • Loan amounts between $250,000 and $5,000,000
  • Competitive interest rates
  • Capital financing for commercial real estate, equipment, renovations, etc.
  • Strong understanding of the ROBS program
  • Up to 90% financing
  • 25 year amortization schedule
  • NO Balloon or loan covenants
  • Deposit accounts available for your ROBS program
ROBS Info Kit

Download our info kit for more in-depth reading about the ROBS Solution

Robust, easy to read, and updated for 2022. This guide is your one-stop shop for all the most important questions about the Rollover Business as Startups Solution (ROBS).


Our fees

Our fees are simple and transparent.

Further reading

To learn more about the Rollover Business Startup Solution, visit our learn page.

Quick FAQ & Further Reading

The Internal Revenue Code and ERISA have firmly codified the ability to use retirement funds to invest in the stock of a sponsoring company as long as certain IRS and ERISA rules are followed.

So long as the retirement funds can be rolled into a traditional 401(k) plan, you can use just about any type of funds you want. This includes 401(k) plans, IRAs (traditional, SEP, SIMPLE) and 457(b) plans. However, you cannot roll Roth IRA funds into a 401(k).

ROBS can used to fund just about any business out there, so long as it is legal (on the federal level), and is active and looking to generate a profit. You cannot use ROBS for a business that only generates passive income, such as rental income.

Learn More: Businesses Funded with Rollover Business as Startups

Yes, your business entity must be a C corporation because it is funded through a stock purchase called, Qualified Employer Securities, which is only available with a C corp.

Yes, you can utilize the ROBS structure, and have co-owners or investors. If they use also use ROBS, they have to be an employee and earn a reasonable salary.

Yes. Just like any company, your new company will be able to borrow funds from any financial institution or third-party to help finance your business. The borrowing of funds will not trigger a prohibited transaction under Internal Revenue Code Section 4975.

Yes! In fact, as part of ROBS, you must be an employee of the business. Your salary must be reasonable for your business type. For more information read: The Beginners Guide to Rollover Business as Startups

So long as it’s an active real estate business, such as a management company, you can use ROBS. At least half of the assets must be real estate that you manage. Note: you cannot use the real estate for personal use.

Just like any workplace retirement plan, you must offer the new 401(k) plan to all qualified employees. Contributions can be made up to the annual limits.

Each year, the 401(k) plan will be required to file the Form 5500 with the IRS. The purpose of the form is to provide the IRS with an annual valuation of the 401(k) plan’s assets.

Yes. In order to file the IRS Form 5500 each year, it is crucial that the qualifying employer securities purchased by the 401(k) plan be valued.