Glossary · Your money in the deal
ROBS
In short
Rollovers as Business Startups — a legal structure that lets you use 401(k) or IRA money for the down payment without early-withdrawal penalties.
What it means in a deal
A ROBS structure involves forming a C-corp, having the corp sponsor a new 401(k), rolling your existing retirement funds into that plan, and having the plan buy stock in your new C-corp — which then has capital to acquire the business. It's legal but complex and requires a specialist administrator. Lenders treat ROBS funds as equity injection, but the structure adds annual compliance costs and scrutiny from the IRS. Use it only if you've exhausted other injection sources.
Related terms
Common questions about ROBS
- Are funds from a Roth IRA eligible for my equity injection if rolled over via a "rollover as business startup" (ROBS) plan?
- Can funds from a retirement account, like a 401(k), be used for my equity injection if rolled into a new C-corp via a ROBS plan?
- What are the specific requirements for a lender to document and verify an equity injection from a retirement account structured as a ROBS (Rollover for Business Startups) transaction?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-16 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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