Home Solutions 401(k) Business Financing (ROBS)
Retirement Funds for Business

Fund Your Business With
Your 401(k) — Tax & Penalty Free

ROBS — Rollover for Business Startups — is a legal IRS-approved strategy that lets you invest your retirement savings directly into your own business without triggering taxes or early withdrawal penalties.

$50K – $5M+ No taxes or penalties No debt — equity funding Setup in 3–4 weeks
Check My Eligibility Talk to a Specialist

At a Glance

401(k) / IRA Business Financing — ROBS

Funding Amount$50,000 – $5M+
Average Used$200,000
Taxes on RolloverNone ✓
Early Withdrawal PenaltyNone ✓
Monthly Loan PaymentNone ✓
Credit Score RequiredNone
Setup Timeline3–4 weeks
Cost to ExploreFree
Check My Eligibility — Free

No credit pull · No obligation · No cost

What Is ROBS

How 401(k) Business Financing Actually Works

ROBS stands for Rollover for Business Startups. It's a legal, IRS-recognized structure that allows you to use funds from a 401(k), IRA, 403(b), or other qualified retirement account to capitalize a new or existing business — completely tax-free and penalty-free.

This is not a loan. You're not borrowing against your retirement account. You're rolling it over into a new retirement plan inside your own C-Corporation, which then invests those funds into the business as equity. The business gets the capital. You retain ownership. No debt, no interest, no monthly payments.

ROBS has been around since the 1970s and has been used by thousands of business owners to fund franchises, startups, acquisitions, and expansions. When properly structured and maintained, it's fully compliant with IRS and DOL regulations.

Important: ROBS must be set up correctly by a qualified ROBS provider and maintained with proper annual compliance filings. BBC connects you to vetted ROBS specialists — we do not set up ROBS plans directly, but we coordinate the full process.

The Core Advantage

Equity Funding With No Debt

Most business financing involves debt — you borrow money and pay it back with interest. ROBS is fundamentally different. Your retirement savings become equity capital in your business. There's no lender, no repayment schedule, no interest rate.

This has powerful implications for your business's cash flow. A typical $200,000 SBA loan might carry a monthly payment of $2,000–$2,500. That same $200,000 via ROBS carries zero monthly payment — freeing that cash for payroll, inventory, marketing, or operations.

ROBS is also one of the only ways to fund a new startup with significant capital without a personal guarantee, collateral, or credit check. If you have the retirement savings, you have the funding.

Many savvy business buyers combine ROBS with an SBA loan — using ROBS to cover the required 10–20% down payment, then financing the remainder with an SBA 7(a) acquisition loan. This is one of the most powerful acquisition financing structures available.

The Process

How ROBS Is Set Up — Step by Step

Setting up a ROBS plan involves 4 legal and financial steps. BBC coordinates the process with a vetted ROBS provider on your behalf.

1

Form a C-Corporation

Your new business must be structured as a C-Corporation (not an LLC or S-Corp). If you already have an LLC, it can be converted. A ROBS provider handles the incorporation and articles of organization.

Week 1 · Legal setup
2

Establish a New 401(k) Plan for the C-Corp

Your C-Corporation sponsors a new qualified 401(k) retirement plan. This plan must be set up to allow investments in employer securities — a specific IRS-compliant feature required for ROBS.

Week 1–2 · Plan creation
3

Roll Over Your Existing Retirement Funds

Your existing 401(k), IRA, or other eligible retirement account is rolled over into the new C-Corp 401(k) plan. This is a direct trustee-to-trustee transfer — no taxes, no penalties, no 60-day window risk.

Week 2–3 · Rollover
4

The 401(k) Invests in Your C-Corp Stock

The new 401(k) plan purchases stock in your C-Corporation. The corporation now has capital — your retirement funds — to operate the business. You own the C-Corp. The 401(k) holds the stock as an investment.

Week 3–4 · Capital deployed
5

Ongoing Compliance

ROBS requires annual IRS Form 5500 filings and ongoing plan administration to stay compliant. Your ROBS provider handles this — typically for a monthly or annual fee. BBC helps you understand the full cost picture upfront.

Ongoing · Annual compliance
How It Stacks Up

ROBS vs. Other Funding Methods

See how ROBS compares to the most common alternatives for startup and acquisition capital.

ROBS 401(k) SBA Loan Bank Loan Personal Savings
No monthly loan payments ✓ ✗ ✗ ✓
No credit score required ✓ ✗ ✗ ✓
No personal guarantee ✓ ✗ ✗ ✓
No taxes or penalties ✓ N/A N/A May apply
Startup-friendly (no revenue required) ✓ Limited ✗ ✓
Preserves personal cash savings ✓ ✓ ✓ ✗
Retirement funds remain invested ✓ (in your business) ✓ (untouched) ✓ (untouched) ✗
Requires ongoing compliance Yes (annual filings) Some reporting Minimal None
Eligibility

Who Qualifies for ROBS?

ROBS eligibility is primarily about your retirement account — not your credit score or business revenue.

You Likely Qualify If...
You have $50,000+ in a 401(k), IRA, 403(b), or similar qualified plan
You plan to be an active employee of the business
Your business will be structured as a C-Corporation
You are funding a new startup or an existing business purchase
Your retirement account is from a prior employer (not current)
You want equity capital with no debt service
ROBS May Not Work If...
You have less than $50,000 in retirement savings
Your retirement account is a Roth IRA (different tax treatment)
You will not be an active employee of the funded business
Your business will be a passive investment or rental property
You are using funds for personal — not business — expenses
Common Questions

ROBS Frequently Asked Questions

Yes — ROBS is legal when properly structured. The IRS has issued guidance acknowledging ROBS as a legitimate strategy. The key is that it must be set up correctly as a bona fide 401(k) plan that invests in employer securities — not as a self-directed IRA or a prohibited transaction. The IRS has also published a ROBS compliance guide. That said, the IRS does scrutinize ROBS plans, which is why working with an experienced ROBS provider and maintaining annual compliance is non-negotiable.
This is the most important question to ask. If your business fails, the retirement funds invested in it are at risk — just like any equity investment. Your 401(k) holds stock in your C-Corp, and if the business closes, that stock may be worth little or nothing. Unlike a bank loan, there's no way to "not pay it back" — the capital is already deployed. This is why BBC specialists discuss ROBS as part of a broader capital strategy, often paired with SBA financing to reduce how much retirement capital is at risk.
Yes — and this is one of the most powerful combinations in small business financing. ROBS can be used to fund the required SBA down payment (typically 10–20%), while the SBA 7(a) loan covers the remainder of the purchase price or startup costs. This means you can acquire a business worth $500,000–$1M+ with little to no personal cash out of pocket, while keeping your debt service manageable through the SBA loan structure.
ROBS setup typically costs $4,000–$5,000 for initial plan creation and C-Corp formation, plus an ongoing monthly or annual administration fee ($100–$200/month is typical) for compliance and annual IRS Form 5500 filings. These costs are paid out of business funds after the rollover is complete — not out of pocket before. BBC helps you understand the total cost structure before you commit to anything.
Most ROBS setups take 3–4 weeks from start to capital deployment. The timeline includes C-Corp formation, 401(k) plan creation, rollover transfer from your existing account, and stock purchase. Some providers can expedite for urgent timelines. If you're using ROBS as part of a business acquisition, factor this timeline into your closing date.
Roth IRAs are generally not eligible for ROBS because the tax treatment is different — Roth funds are post-tax and have specific distribution rules that conflict with the ROBS structure. Current employer 401(k) plans typically cannot be rolled over while you're still employed, though some plans allow in-service distributions after age 59½. Most ROBS plans use funds from a prior employer's 401(k), a traditional IRA, or a 403(b). Your BBC specialist can help determine which accounts are eligible.
Put Your Retirement to Work

Your 401(k) Could Be
Your Best Business Partner

Find out in minutes whether you qualify for ROBS — and whether it makes sense for your specific situation. Our specialists walk you through the full picture before you commit to anything.

Check My Eligibility Schedule a Free Call
No Credit Check 100% Free to Explore Zero Obligation
Also Available

Explore Other Funding Solutions

Business Acquisition Financing

Buy an existing business with SBA or conventional loan. Often combined with ROBS.

Up to $5M →

SBA Loans

Government-backed loans — ideal to pair with ROBS for acquisition down payment.

Up to $5M →

Startup Funding

No revenue required. Unsecured funding up to $150K based on personal credit.

Up to $150K →

Unsecured Business Funding

No collateral. No business revenue required. Fast and flexible.

Up to $150K →