Glossary · Your money in the deal
Rollover as Business Start-Up(ROBS)
In short
A financing strategy allowing you to use your retirement funds, such as a 401(k) or IRA, as an equity injection for a business acquisition without incurring taxes or penalties. It involves setting up a new C corporation and a qualified retirement plan.
What it means in a deal
ROBS is a common but complex way to fund your down payment without personal income tax consequences. You must work with a specialist firm to establish a compliant structure, as errors can lead to severe penalties. Lenders are accustomed to seeing ROBS structures for equity.
Related terms
Common questions about Rollover as Business Start-Up
- What are the minimum cash equity requirements for acquiring a start-up business with an SBA 7(a) loan?
- How should a lender document the 'prudent lending standards' applied when approving a 7(a) loan for a new business start-up?
- What if I want to use my 401k funds, structured as a rollover, for my equity injection?
- Are funds from a Roth IRA eligible for my equity injection if rolled over via a "rollover as business startup" (ROBS) plan?
- Does my business need to be set up as an LLC or Corporation for an SBA 7(a) loan?
- What are the specific requirements for using retirement funds, structured as a rollover, for a 7(a) loan equity injection?
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 2026-06-15 · 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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