Glossary · Your money in the deal
Rollover as Business Startup Plan(ROBS plan)
In short
A method to use funds from a Qualified Retirement Plan to finance a business acquisition without incurring early withdrawal penalties or taxes. It involves creating a new C-corporation and a new 401(k) plan.
What it means in a deal
Many buyers use a ROBS plan to fund their equity injection for an SBA 7(a) loan. This allows you to leverage your retirement savings, but it's a complex process requiring careful compliance with IRS and DOL rules. Ensure you work with a specialist firm experienced in ROBS structures to avoid issues that could jeopardize your loan or retirement funds.
Related terms
Common questions about Rollover as Business Startup Plan
- Are funds from a Roth IRA eligible for my equity injection if rolled over via a "rollover as business startup" (ROBS) plan?
- What specific elements of a borrower's business plan must a lender critically evaluate to meet prudent lending standards for a startup?
- What if I want to use my 401k funds, structured as a rollover, for my equity injection?
- What are the specific requirements for using retirement funds, structured as a rollover, for a 7(a) loan equity injection?
- 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?
- What if the business I'm acquiring is a startup with limited operating history?
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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