At Tenet Financial Group, a large majority of our clients are using their qualifying 401(k)/IRA retirement funds to help start a new business, buying an existing business or recapitalize their business. The process – called ROBS (Rollover as Business Start Up) – allows a business owner to invest in themselves and their businesses by essentially “rolling over” their existing 401(k)/IRA retirement funds into a new retirement plan that invests in their new C Corporation.
We’ve already shared some of the top benefits of a ROBS funding plan in this blog on our website, but let’s take a look at a few more benefits of this tax-deferred and penalty-free funding option:
ROBS funding is not a distribution.
Taking existing retirement funds and moving them to another investment – even your brand new C Corporation’s retirement plan – is not considered a taxable distribution by the IRS, thus you aren’t penalized come tax time for taking a premature distribution.
ROBS helps you start your business with improved cash flow and business equity.
ROBS/401(k) rollover funding is not considered debt the minute you open the doors for business. Less debt means more money for operational expenses such as inventory and salaries, not to mention more initial business equity. And, let’s be honest, less debt is always the best possible position to find yourself in from a business owner’s perspective.
ROBS funding can be used with other loan types.
ROBS funding can – and is often – used in tandem with other loan types, including SBA loans. ROBS/401(k) is not a mutually exclusive funding option, so it plays well with others.
ROBS funding frees up time for the business owner.
You, as the business owner, don’t have to spend time worrying about making payments, changing interest rates and other considerations once your C Corporation is set up. Tenet Financial Group will handle the administration of your new C Corporation’s plan and remove that time suck from your day.
ROBS funding takes full advantage of provisions of the Tax Cuts and Jobs Act.
Corporations funded by ROBS rollovers plans get to take full advantage of the newly-reduced tax rate for corporations as part of the Trump Administration’s Tax Cuts and Jobs Act. The permanent business income tax reduction from 35 percent to 21 percent couldn’t be better news for American businesses.
Tenet Financial Group is ready to answer your questions and help you get business funding in 2018! Call 1-888-901-3335 to speak with a Senior Consultant or check out the free funding calculator on our website that you can use obligation-free to see what types of funding you might qualify for.