How it works
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.”
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.
4. Purchase stock
Using your 401(k), purchase the C Corporation’s newly issued stock at fair market value.
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.
6. Earn a salary
Now you can earn a salary from the revenue of the business and personally guarantee any business loan.
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.
- 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
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).