IRA, 401(k) TSP, 403b, Keoghs, 457…these are just a few of the qualifying retirement plan account types that can be used to start your business or buy a franchise debt-free. It’s true – certain pre-tax retirement plans can be rolled over into new plans, making these funds available for purchase, refinance and even working capital. This funding type, coined ROBS (Rollover as Business StartUp) and also known as Self-Directed 401(k), has been approved by the IRS since 1974 and is based on “rolling over” or moving your retirement funding from one account to the new retirement plan of your new business.
The ROBS process is not a distribution of retirement funds. It’s moving the funds from one plan to another. Since it is not a distribution, there is no early-withdrawal penalty assessed for using the funds to buy, start, refinance or expand a business or franchise.
Because the money is already yours and you are simply moving it to a new corporation, this funding type is not based on credit score, collateral or business plan (and such) and is usually very fast – 3-4 weeks typically.
ROBS Rollover Funding is not a loan because the money is already yours in the form of your retirement account. Therefore, no repayment is required. ROBS Funding Plans are an ideal scenario for starting a business debt-free and increased financial position/equity from day one.
These are just three of the benefits of ROBS Funding, but numerous other ones do exist. To learn more about debt-free funding through ROBS/401(k) Rollover Funding Plans, contact Tenet Financial Group and our Senior Consultant team: (888) 901-3335. Our team has more than eight decades of combined funding expertise and is a consultative, not sales-focused, Third Party Administrator (TPA) of 401(K) Rollover Plans. We’re ready to answer questions, discuss your options and much more!