ROBS Funding - Turn Your Retirement Into Business Capital
What if you could access your retirement funds to start your business without penalties, taxes, or taking on debt? Here's how ROBS funding makes it possible.
Starting a business often feels like a catch-22: you need money to make money, but traditional funding comes with strings attached. Bank loans require perfect credit and collateral. Investors want equity. Personal loans carry high interest rates.
But what if there was a way to use money you already have—your retirement funds—without the typical penalties and tax consequences?
Enter ROBS (Rollover as Business Startup) funding, a legitimate strategy that's been helping entrepreneurs for nearly four decades.
What Is ROBS Funding?
ROBS allows you to roll over funds from your 401(k), IRA, or other qualified retirement plans directly into your new business. When structured properly, this transaction is:
- Tax-free - No immediate tax consequences
- Penalty-free - No early withdrawal penalties
- Debt-free - No loans to repay
The key is "when structured properly." ROBS isn't a DIY project—it requires establishing a C-corporation, setting up a qualified retirement plan for your new business, and following strict IRS guidelines.
How ROBS Works
Here's the simplified process:
- Form a C-Corporation - Your new business entity
- Establish a 401(k) Plan - For your new corporation
- Roll Over Your Funds - From your existing retirement account to the new plan
- Purchase Company Stock - Your new 401(k) buys stock in your C-corporation
- Use the Capital - Your business now has the cash to operate
This isn't a loan or early withdrawal—it's an investment by your retirement plan into your business.
Who Should Consider ROBS?
ROBS funding works best for entrepreneurs who:
- Have at least $50,000 in qualified retirement funds
- Want to maintain 100% ownership of their business
- Prefer not to take on debt or give up equity
- Are committed to working in the business full-time
- Understand the ongoing compliance requirements
The Benetrends Advantage
Not all ROBS providers are created equal. Benetrends Financial pioneered this concept nearly 40 years ago with their exclusive Rainmaker Plan®. Their ROBS+ structure offers advanced corporate protections that go beyond standard ROBS arrangements.
With over 30,000 entrepreneurs successfully funded, Benetrends has the experience to navigate the complex regulations while protecting your interests.
Real Success Stories
Vern Taylor II used ROBS funding to launch his Budget Blinds franchise:"Benetrends helped me realize the reality of owning my own business, by utilizing a portion of my tax-free retirement savings to self-fund my dreams!"
Dave and Sue George funded their Dogtopia franchise through Benetrends:"They made the funding process feel easy and personal—like they were part of our team from the start. We wouldn't be where we are without them."
Important Considerations
ROBS funding isn't right for everyone. Consider these factors:
Advantages:
- Use your own money
- No debt service
- Maintain full control
- Fast access to capital (2-3 weeks)
- No personal guarantees
Considerations:
- Ongoing compliance requirements
- Your retirement funds are at risk
- Must operate as a C-corporation
- Annual administrative costs
- IRS scrutiny if not properly maintained
Is ROBS Right for Your Business?
ROBS works particularly well for:
- Franchise purchases
- Existing business acquisitions
- Service-based businesses
- Retail operations
- Businesses requiring working capital
It's less suitable for:
- Passive investments
- Real estate holding companies
- Businesses you won't work in full-time
Getting Started
If ROBS funding sounds like a fit for your situation, the next step is consulting with qualified professionals who specialize in this area. The setup process is complex and requires expertise to ensure compliance with IRS regulations.
Remember, this strategy involves your retirement security, so working with experienced providers like Benetrends—who pioneered the concept—can make the difference between success and costly mistakes.
Your entrepreneurial dreams don't have to wait for traditional funding. With proper planning and expert guidance, your retirement funds could become the foundation of your business empire.
