Need money to open your dream business?
Give it to yourself.
Use your 401(k) or IRA to finance your own business to start out debt free.
Learn more about Rollover Business Startups by downloading our free ebook.
If you’ve always wanted to start your own business but felt overwhelmed by the financing process, it’s time to look into 401(k) business financing. Also known as Rollovers for Business Startups (ROBS), this financing method enables you to collect your own money from your own retirement account to start or buy a business — without incurring fees or penalties.
Banks are highly likely to reject a loan for a small business, and, if you’re in the minority of applicants who get approved, your business starts out both in debt and at the mercy of interest rates. If you turn to private investors, you no longer own 100 percent of your company. But with ROBS financing, you can start your business out debt free, putting you fully in control of your investment..
Discover why using your retirement funds to start a business makes sense.
Simplified QualificationWith 401(k) business financing, you don’t have to have perfect credit, experience or referrals, and you don’t have to put up collateral — you’re simply giving yourself money you’ve already earned that’s sitting in a retirement account such as a 401(k) or an IRA.
It’s Not a LoanInstead of borrowing money, you’re simply gaining access to your own money. There’s no payback schedule or interest to worry about.
Start Out Free of DebtBy starting your business debt free, your overhead is significantly minimized, and you don’t have to risk any equity you’ve built up in your collateral — often your home. Instead, you can start turning a profit much sooner than a business that was started with a traditional bank loan.
While a typical bank loan can take up to six months to come through, ROBS gets you access to your money quickly: Most of our clients have their money in hand within 2–3 weeks.
Deferred Tax BenefitsAside from not having to pay taxes or penalties on early withdrawals, your new business will also be subject to many tax-deferred benefits throughout its operation (as well as when you leave it).
Form a C Corporation
We’ll walk you through the process of creating a C Corporation. This type of business entity is legally separate from both the investor (you) and your retirement plan.
Create a 401(k) plan for your corporation
Next, we’ll custom design a new 401(k) plan for your corporation based on how you envision your company’s growth.
Rollover your personal retirement account to your new company’s retirement plan
Now that your C Corporation’s retirement plan is set up, you can move your existing retirement funds into your new retirement plan.
Use your new retirement plan to buy stock in your corporation
The fourth step is to use the funds in your new retirement account to purchase stock in your new C Corporation, which means issuing ownership shares of it.
The funds become available
Once you’ve purchased your own stock, those funds are now available to start, buy or expand your business, and they can be used for any normal business expense — they may not be used for personal expenses that only benefit you.
“My research into ROBS revealed two absolute truths: the process is complex and it needs to strictly adhere to IRS and DOL regulations. I turned to Frank because I like that he has a background as a lawyer. Frank was knowledgeable, patient and very generous with his time. He never made me feel like the meter was always running.”
– Scott M.
Your level of financial expertise isn’t important when it comes to ROBS financing. The only thing you need is a qualifying retirement plan, and, luckily, most plans qualify.
This type of plan is usually employer-sponsored, and it is the most commonly used plan in regards to ROBS.
This is another popular plan where you can invest your pre-tax income to grow tax-deferred. Roth IRAs are a completely different type of plan, and they do not qualify for ROBS funding.
A Simplified Employee Pension (SEP) plan enables employers and self-employed individuals to easily contribute toward their employees’ (or their own) retirement.
Also known as a tax-sheltered annuity, this retirement plan is geared toward certain public-school employees, ministers and tax-exempt organizations.
This tax-deferred pension plan is normally found amongst the self-employed, as well as unincorporated businesses.
The Thrift Savings Plan (TSP) is a retirement and savings investment plan reserved for federal employees and certain military members.
Experience the Frank Selden Difference
At 401k ROBS Pros, we guarantee your ROBS setup will be created and managed by Frank Selden, located near Seattle, Washington, who is among the top ROBS providers in the country — not just when documents are being signed. And we will refer you to a trusted Third-Party Administrator (TPA) who will customize your plan to suit your company. The TPA will administer your 401(k) plan for you, leaving you to run your business.
|401K ROBS PROS||THE OTHERS|
|Expertise||CEO Frank Selden is among the top ROBS providers in the country. As a former tax attorney, Frank is well-versed in ERISA, a federal law that protects the interests of employees (and their beneficiaries) enrolled in retirement plans. In addition to helping thousands of people find the funding necessary to launch a business, Frank has also provided accredited professional training to attorneys and CPAs across the US.||You will often speak with sales representatives who are NOT attorneys and whose primary focus is selling the product - not helping you determine the best option for your business.|
|Information||Before starting the process, we’ll not only ensure you have all the information you need to decide if ROBS is right for you - we’ll also make sure you meet the legal criteria.||May get you involved in the process (and collect payment) before determining whether legal criteria can be met and that ROBS is your best option.|
|Plan Design||For no additional fees, we will design a customized 401K plan for your future growth that will ensure continued ERISA compliance through a variety of investment options.||Leave investment options up to you - potentially making you vulnerable to ERISA noncompliance, which can result in IRS code violation.|
|Plan Administration||We work with the best 401k administrators in the business. These experts will work closely with you to ensure all the required forms are completed and that ERISA compliance is being met.||Have “in-house” staff with high turn-over and questionable retirement plan expertise. For example, there are a great deal of forms that must be completed for each ERISA plan, yet many ROBS providers will only file form 5500 - leaving the rest up to you.|
|Fees||Services include: expert legal advice throughout the entire process, corporation formation, and plan design and set-up, all for a flat rate of $4,950.||$4,000 - $5,000 Service offerings and competence levels will vary.|
|Privacy||We know you value your privacy. We do too. That’s why we won’t ever share your private information without your express consent. Additionally, our COO has an extensive background in cyber security and has helped companies like Amazon and Microsoft keep information safe and protected.||Many ROBS providers get referral kickbacks by sharing your information with franchisors and other financial service providers.|
“Frank Selden was instrumental in the creation of my corporation using my IRA funds. Frank and his team are well versed in the process and, from start to finish, made it effortless and simple to execute. There are plenty of companies that claim to handle the ROBs process — but they’re just marketing firms, whereas Frank’s experience is evident from day one.”
– Bryan V.
Learn more about Rollover Business Startups by downloading our free ebook.