Wouldn’t it be great to have a way to fund your business with the money you already have and avoid the debt and hassle of small business loans? Good news. There is. Using your retirement funds can help you start your business debt-free. And with no loan payments to worry about, it also increases your cash flow. If, however, you do need or want to take out a business loan, your retirement funds can also make for a smart equity injection a lender may require.
Your financial statement is comprised of all your accounts – checking, savings, investments, retirement accounts, and so on. Now, you’ve paid taxes on some of it, like the money in your checking account. At the same time, the taxes on your retirement accounts are deferred until you take it out. With the Rollover for Business Startup (ROBS) strategy, you can access some or all of your tax-deferred savings now and invest it into your business.
The ROBS process is governed by the Internal Revenue Service (IRS) and the Department of Labor (DOL) and has been legal since the (Employee Retirement Income Security Act) ERISA of 1974. FranFund facilitates the ROBS program through our proven, compliant FranPlan® program.
Availability of funding in as little as 10 days
Funds may be used as the equity injection for an SBA loan
With no debt service on a loan, the business is likely to reach the break-even point sooner
Credit score and current financial situation are not factors
You are building wealth with a tax-deferred investment and creating equity in the new company
Get started for free with our no-risk SafetyNet™ option.
The FranPlan® (401(k) Rollover) process normally takes between 15 and 20 business days, with the majority of time allocated to moving funds from your current 401(k) custodian to your new custodian.
Using the SafetyNet Program, you can get a head start and move your money at no cost. Should your plans change and you choose not to move forward with the business, that’s okay. There’s nothing to undo, no refunds to initiate. Your money is safe in an IRA.
When using a Rollover for Business Startups (ROBS) funding strategy like the FranPlan®, the Internal Revenue Service (IRS) and Department of Labor (DOL) have strict guidelines regarding the execution of the plan. While not frequent, the IRS and DOL may audit your business to verify compliance with all ROBS 401(k) rules. FranFund's audit rate is less than 1%, with no disqualified plans during an audit.
After your rollover is complete and your FranPlan® is implemented, our in-house Third Party Administration (TPA) Team manages your plan. You will have a dedicated TPA administrator who will work with you to ensure your plan's compliance.