A Rollover for Business Startups (ROBS) is a financing solution that lets you purchase a business with your retirement savings without paying early withdrawal fees or tax penalties. These transactions can be difficult and confusing, which is why we recommend using an experienced provider. We compare the best ROBS providers below.
Best ROBS Provider: Guidant Financial
Guidant Financial topped the list because they complete more ROBS transactions each year than any other provider and they’re the only ROBS provider that offers free outside counsel to you before, during, and after your ROBS transaction is complete. It takes about 2-3 weeks to get funded and the whole process starts with a free consultation.
Top 5 ROBS Providers 2018
| ROBS Provider | |
|---|---|
| Guidant | (Best Overall) Startups that want an experienced provider with the highest level of service at a great price. |
| FranFund | Entrepreneurs looking to fund a franchise with ROBS or ROBS + SBA. |
| Benetrends | Startups looking for the provider that’s been successfully doing ROBS the longest. |
| MySolo401k | Startups looking for the most affordable ROBS option available. |
| Catchfire Funding | Entrepreneurs who don’t want to go with one of the four primary options above. |
How We Determined Which ROBS Provider is the Best
Rollover for Business Startup (ROBS) providers typically help you set up a ROBS, which can be confusing. While all providers can help you through the transaction, the best ROBS providers differentiate themselves through their experience and support. For example, since a ROBS is complicated, many guarantee help in case of an audit.
The criteria we use to determine the best ROBS provider includes:
- Setup costs
- Ongoing fees
- Support provided before and after the transaction
- How easy it is to communicate with the provider
- Past success with ROBS
- What additional financing is offered by the provider
When looking at all of these factors, we were able to find many great ROBS providers experienced enough to successfully help you through the transaction. In an industry where most providers have similar offerings, Guidant stood out due to the level of support they offer their customers.
For example, with a ROBS, trying to determine if it’s right for you can be just as difficult as the actual transaction process itself. Guidant is the only provider that gives you the chance to speak to an outside attorney who is experienced with ROBS transactions before you sign up. The best part is it doesn’t cost you anything.
Guidant also gives their customers more assurances during a potential audit than any other provider. At no additional cost to you, they’ll provide you with outside counsel to help you through the audit process. Working with Guidant on a ROBS transaction costs $4,995 to set up and an ongoing fee of $139 per month. Your business can receive funds in as little as 2 weeks.
Best Overall ROBS Provider: Guidant
Guidant is the best fit for most entrepreneurs looking for a ROBS provider because they complete more ROBS transactions each year than any other provider, and also offer more upfront support. For example, they’re the only ROBS provider that offers a free outside counsel consultation before you sign up. Plus their costs are competitive with the other top ROBS providers.
What Guidant Offers
Over 1,600 small business owners use Guidant every year to complete a ROBS transaction, and they’ve never had one disqualified through an audit. They offer competitive pricing and are experienced with franchises, with about 60% of their clients owning a franchise. Around 0.32% of their ROBS plans get audited every year, which is slightly lower than other providers.
Ongoing Support
Guidant is the only ROBS provider that offers free outside counsel for you before, during, and after your ROBS transaction is complete. For example, every potential Guidant customer receives two 1-hour sessions with an outside attorney to evaluate whether or not a ROBS is the right financing option.
Guidant also guarantees in their contract that they will pay for outside counsel to help you through any audit of your ROBS retirement plan. Other providers say they will provide this level of support, but only Guidant guarantees it in their contract.
If and when you eventually sell your business, Guidant helps make sure the retirement plan is closed down and rolled into an IRA account. They make sure all of the appropriate paperwork is finalized, and file your last IRS Form 5500 for the year your business is sold. Typically, Guidant will charge you their monthly fee for a few months after the sale of your business so they can finish up these tasks on your behalf.
Additional Financing Offered
In addition to ROBS, Guidant helps their clients obtain financing for SBA loans, unsecured loans, portfolio loans, and equipment leasing. For this service, you pay Guidant a $2,500 consulting fee to start working on your loan request.
They will guide you through the application process and introduce you to lenders they have partnerships with. If you don’t get funded with Guidant’s help, they’ll reimburse the $2,500 fee. However, if you decline a potential loan because you don’t like the terms they’ll keep the fee. Guidant also collects a fee from many of their lender partners, but it doesn’t impact your overall loan costs.
Guidant Costs
Guidant has two main costs with a ROBS transaction:
- Setup Fee: $4,995
- Ongoing Maintenance Fee: $139 per month for up to 10 employees, $3.33 per employee per month after 10.
Guidant costs a little bit more than some of the other options on the list but we think it’s justified due to the outside counsel offered at the expense of Guidant. The extra cost, when compared to other providers, is very minimal and could be as little as $9 per month.
What Guidant is Missing
Guidant is a great option to help you through the ROBS transaction, but they do cost a little bit more than the competition. They’re also not as integrated into the franchise community as some of their competitors, where ROBS are very popular.
Guidant Financial Reviews
Guidant Financial has an A+ with the Better Business Bureau. Positive reviews around the web tend to highlight the speed and efficiency in getting startups funded. Negative reviews and complaints tend to center around technical issues when restructuring a business or deciding to close a 401k plan and temporary billing errors. For more information, you can read our user reviews of Guidant Financial.
How to Apply With Guidant Financial
With Guidant, you can get funded with a ROBS in 2-3 weeks. The whole process starts with a free consultation where you can ask all of your questions and find out whether a ROBS is right for you. Guidant then offers you two 1-hour sessions, free of charge, with an outside counsel to decide if your personal situation merits a ROBS.
Best ROBS Provider For Franchises: FranFund
FranFund is the best fit for franchises looking for a ROBS arrangement because they’re more ingrained into the franchise community than their competitors. Around 97% of their clients in 2017 were franchises, and their CEO sits on the supplier board of directors for the International Franchise Association.
The founders of FranFund are even past franchise executives and owners, so they aim to build a financial partner that understands the trials that franchises go through. Their combined experience and knowledge of the franchise industry and ROBS transactions makes them the best partner for franchise owners.
What FranFund Offers
FranFund’s ROBS offering is similar to Guidant’s, but FranFund focuses mostly on franchise businesses. They also offer lower overall costs and plenty of ongoing support. For example, before you sign up, they have a unique program called “The Safety Net Program” that helps you shorten the time it takes to go through the ROBS process, at no cost to you.
What this program does is guide you through the process of moving your funds into an IRA account before you start the ROBS so that you can get funded faster. Normally, you’d have to wait for your funds to move out of your 401k account, which takes much longer. Having the funds in a tax deferred IRA account is what enables you to get funded in as little as 2 weeks.
Ongoing Support
FranFund offers plenty of ongoing support once you complete the ROBS transaction, including the promise of outside counsel during an audit. While they don’t explicitly outline this in their contract, they do promise verbally that they’ll provide you with outside counsel at no additional cost to you, if it’s needed.
FranFund will also do all of the legwork and help you sign up eligible employees to your 401k plan. They’ll prepare and file your annual 5500 forms, and they’ll work with you every step along the way to make sure you have your questions answered as they come up. Their ongoing support level is similar to Guidant’s, except that Guidant actually has audit help outlined in their contract.
Additional Financing Offered
FranFund helps you choose the right financing option for your franchise, including SBA loans, unsecured business loans, equipment financing, and securities backed financing. They’ll package any potential loan request and submit it to lenders on your behalf. Lenders are hand-picked by FranFund to increase the likelihood of getting your loan funded. They receive a fee when you close a loan, but it shouldn’t impact your total loan costs.
FranFund also offers direct lending options through FastForward Capital. They offer conventional loans for mature franchise brands to fund existing franchise expansion. This makes them a good financial partner to fund your franchise with a ROBS, Allowing you to come back to later when you need capital to grow.
FranFund Costs for the FranPlan
FranFund has two main costs with a ROBS transaction:
- Setup Fee: $4,795, $3,995 for Veterans
- Ongoing Maintenance Fee: $130 per month
What FranFund is Missing
FranFund doesn’t guarantee the use of an outside counsel during an audit through their written contracts. While they say they’ll provide this additional feature if it’s needed, Guidant promises it in writing.
FranFund Reviews
FranFund user reviews are mostly positive and they maintain an A+ rating with the BBB. The negative reviews that do exist tend to express a general egret about using a ROBS for their business but not faulting FranFund directly. For more information, you can read our user reviews of FranFund.
How to Apply With FranFund
You can start with the application process for a ROBS through FranFund by signing up online for a free consultation. They offer a Safety Net Program, which helps guide you through the process of moving your retirement funds into a tax deferred IRA account, at no cost. This will speed up the ROBS transaction and help you get funded in as quick 2 weeks.
ROBS Provider With Longest Track Record: Benetrends Financial
Benetrends Financial is the right provider if you’re looking for the one with the most experience. This matters for a ROBS because of all the details required in order to be compliant with both the IRS and the Department of Labor. Benetrends, with their Rainmaker Plan, is the pioneer of ROBS and has been facilitating rollovers for over 30 years – at least twice as long as any other provider.
What Benetrends Financial Offers
Benetrends has never had a Rainmaker Plan disqualified in over 30 years, and they complete about 1,200 ROBS transactions per year. Just under 75% of their clients are franchisees, so they’re another good option for franchise funding. They offer a competitive price with similar ongoing support as their competitors.
Ongoing Support
Benetrends offers a guarantee that their on-staff professionals and attorneys will help you through all matters of your audit without any additional costs. If your audit case becomes more complicated than they can handle, they promise to provide outside counsel at their expense, but it’s not a guarantee written in your contract. Benetrends believes that 95% of their clients can get through an audit without outside help.
Additional Financing Offered
Benetrends works with clients on a number of loan options that include loans for startups, SBA loans, equipment financing, and more. They’ll help you find a lender and then work with you through the process of getting your loan closed. Benetrends requires a $2,500 fee to begin the loan application process, but it’s reimbursed if they can’t get you a loan offer.
Benetrend Costs for RainMaker Plan
Benetrends has two main costs in a ROBS transaction:
- Setup Fee: $4,995
- Ongoing Maintenance Fee: $130 per month
The fee covers all of Benetrends’ services for as long as you’re a paying client. You can cancel at any time with a 30-day notice, but Benetrends will no longer service your account at that time.
What Benetrends is Missing
Benetrends has the experience and can guide you through a ROBS as well as anyone, but they’re middle of the road in both their cost and their ongoing support. They’re not any more affordable to setup a ROBS than Guidant or FranFund, and they don’t guarantee you access to an outside counsel when you need it within your written contract.
Benetrends Reviews
Benetrends maintains an A+ rating with the BBB and generally has positive reviews around the web, including from people who used both their Rainmaker Plan as well as their SBA loan packaging. For more information, you can read our user reviews of Benetrends.
How to Apply With Benetrends Financial
You can apply online for a free consultation with Benetrends to make sure a ROBS with their Rainmaker Plan is the right choice for you. If you’re ready to move forward after that, you’ll pay your setup fee and start the process of rolling over your retirement funds into your business, which typically takes 2 – 3 weeks.
The Most Affordable ROBS Provider: MySolo401k
MySolo401k is the right option if you want the most affordable provider because their upfront fees are lower than anyone else, and they waive your maintenance fee for the first year. My Solo 401k Financial can be a great choice to help anyone through a ROBS transaction because they have experienced compliance officers and attorneys to guide your transaction and promise outside counsel when needed.
What MySolo401k Offers
MySolo401k provides the guidance needed to complete a ROBS transaction with the lowest costs and strong ongoing support. Their audit guarantee is as strong as anyone else’s in the industry, promising that your plan will be compliant with the IRS and DOL standards. If it’s ever determined not to be compliant, they’ll pay for an outside counsel to represent you through any tax court proceedings.
Ongoing Support
MySolo401k offers unlimited ongoing support to ROBS experts and attorneys. They handle all of your ROBS paperwork for you, including preparing and filing your Form 5500 and the addition of newly eligible plan participants. They also have an audit guarantee on their website that promises to help you through any plan audit and promise to pay for an outside attorney to represent you if the DOL or IRS ever allege that your plan was a prohibited transaction.
Additional Financing Offered by My Solo 401k Financial
MySolo401k focuses on ROBS, but they also partner with third-party lenders that offer SBA loans. MySolo401k can therefore assist their you with everything from finding an SBA-approved lender to closing the SBA loan.
In addition to their ROBS and SBA financing, they also offer retirement accounts such as Solo 401ks and Self-Directed IRAs. However, these are not used to invest in your small business.
MySolo401k Costs
MySolo401k has two main costs with a ROBS transaction:
- Setup Fee: $4,000, $3,500 for veterans
- Ongoing Maintenance Fee: $899 annually for up to 10 participants, $75 annually for each additional participant. This fee is waived for the first year.
What MySolo401k Financial is Missing
MySolo401k offers a nice ROBS option and we are currently collecting more data and speaking with representatives from the company on their other service offerings, such as SBA loan packaging. We will update this article as soon as we have more information on MySolo401k.
MySolo401k Reviews
My Solo 401k Financial has maintained an A+ with the Better Business Bureau and has the most reviews of any ROBS provider we reviewed. You can read our user reviews of MySolo401k.
How to Apply With MySolo401k
You can start the application process by filling out an online form that takes about 10 minutes. Once that’s complete, MySolo401k representatives will reach out to you for the next step in the process, which takes 2-3 weeks.
Another ROBS Provider Option: Catchfire Funding
Catchfire Funding is another ROBS option available to entrepreneurs wanting to use their 401k to start a business. They’re helpful to potential business owners who aren’t sure what type of business they want to purchase because Catchfire will help you through the process of identifying a company. However, we recommend first checking out one of the previous providers on our list and using Catchfire Funding as a last resort.
This is because one major drawback to Catchfire is that they’re not upfront about their terms or costs. It’s unclear how good of a fit they’ll be until you get into the process and learn more.
What Catchfire Funding Offers
Catchfire Funding offers help with ROBS transactions through their Self-Directed 401k Funding program. They’re not upfront about their costs, but the process appears to be similar to their competitors.
Ongoing Support
One thing that separates Catchfire Funding from their competition is that they’ll help you find the right business or franchise to buy or start. Catchfire Funding does not provide details on how much support they give after the ROBS transaction is complete, but they appear to provide at least basic services, such as preparing and filing your 5500 form.
Additional Financing Offered
Catchfire Funding also offers SBA loans through Diamond Financial.Catchfire Funding is an affiliate of Diamond Financial, so they’ll receive a fee when your loan closes, but it’s unclear if it will affect your total cost.
Catchfire Funding Costs
Catchfire Funding has two main fees associated with a ROBS:
- Setup Fee: Unknown
- Ongoing Maintenance Fee: Unknown
Unfortunately, it’s unclear how much Catchfire Funding costs because they’ll only provide the information to prospective clients. They do offer a guarantee that if your ROBS either doesn’t go through within 90 days, or if it fails an audit, they’ll reimburse you whatever fees you’ve paid to that point.
What Catchfire Funding is Missing
They’re not upfront about their process, ongoing support, or their fees. They also don’t appear to offer any direct lending themselves. While their ongoing guarantee is nice, they don’t guarantee the help of outside counsel at their expense.
Catchfire Funding Reviews
Catchfire Funding has an A+ reating with the BBB but has no reviews there. In fact, there are surprisingly few user reviews available for Catchfire Funding. Check out our user reviews of Catchfire Funding to learn more.
How to Apply With Catchfire Funding
To apply for startup financing with Catchfire Funding you can fill out an online form to sign up for a free consultation. They’ll work with you to determine your options. If you move forward with a ROBS then you can expect to be funded in 3-4 weeks.
Bottom Line
In an industry where all providers offer a similar product, it’s difficult to separate the providers by much. Each of them has similar fees and promise ongoing support to help you through your ROBS transaction, even through the difficult task of managing it. The best one for you probably depends on what type of business you have and how you plan on using your ROBS.
However, Guidant has separated themselves from the competition in the industry through their expertise and level of service. They help more business owners through the ROBS transaction every year than any other provider, and they provide more outside counsel support than anyone else, at no additional cost. You can sign up for a free 1-on-1 consultation to get started with Guidant today.
Louis
Do i have to continue the yearly administrative fee or can I do it myself after the rollover has been done.
Jeff White
Hi Louis!
Part of the complication in using a ROBS is setting it up, but the other difficult part can be correctly abiding by the rules after you’ve received the money. You could technically do it by yourself, but you’ll need to be confident that you can fill out the annual 5500 form, know when employees become eligible, and have a system in place to notify eligible employees of their rights within weeks of them becoming eligible. If you feel comfortable in those things and think you understand it then it’s not required you use a provider. However, to prevent your business from making a mistake we recommend using an experienced ROBS provider.
Best,
Jeff
Krista
Thanks for your objective article, Jeff. Do you have any similar information/research on Pango Financial?
Jeff White
Hi Krista!
Currently we haven’t done a complete write-up on Pango, but we’ll include it to our list of providers to consider in the future.
Best,
Jeff
Alex Rowzani
want more info please
Jeff White
Hi Alex!
Thanks for your inquiry into a ROBS! Essentially, a Rollover for Business Startups is a great way to fund a new business, the purchase of business assets, or a franchise. It helps you rollover your current retirement funds into a tax deferred account that gives your business full access to the funds because the new retirement account buys shares of the business. To learn more you should check out our ROBS ultimate guide.
Best,
Jeff
Nick
Hey Jeff,
Is the ROBS setting up fee and other expenses are tax deductible? From what I read, the ~5K is a one time fee that set up your corporation and all the legal entities. The monthly fee is recurring as long as ROBS in effect.
Jeff White
Hi Nick!
The $5k is for more than just setting those up, but also helping you through the set up and origination process. Most loan origination fees are tax deductible, which is what some try to classify this as. However, it’s really more of a consulting fee. I recommend discussing that particular portion with a CPA that can help you through that process, but a regular consulting fee should be deductible as a business expense. This means that you’d use the $5k to reduce your business income, but it wouldn’t be claimed as a separate tax deduction.
If you’re seriously considering a ROBS I suggest you get a free 1-on-1 consultation from one of our ROBS providers who can help answer all of your questions. ROBS are so unique to individual situations that it’s important for a professional to give you the answers that are right for you.
Best,
Jeff
Dan Murray
Is your company paid by Guidant to be chosen as the best? I read on the internet that Guidant was shut down by the IRS back in 2008 for thier rollover program not following the rules. I’m also wondering why you need outside counsel if ROBS is such a standardized program? i want to use my funds for a business, but I am a bit nervous. Thanks for your response.
Jeff White
Hi Dan!
Guidant isn’t sponsoring the article, we just believe that they are the best overall option. I’m not sure where you read that on the internet, but I don’t believe that ever happened to Guidant. In fact, 2008 was the year when ROBS really became their own industry. In 2008, the IRS released their memo on ROBS guidelines, officially recognizing it as a viable transaction that they wanted to create some guidelines or rules for. Guidant has been at the top of the industry, amongst the lowest audit rates in the country. And they’ve never had a plan disqualified.
It’s not that you NEED an attorney, but it sure is nice to know you will get one if you do need one. Not every situation is the same. Some individuals have very complex retirement accounts, and there are more rules relating to those situations. Following the guidelines of a Guidant or a Benetrends during the setup and throughout the time you have the money invested, should give you enough confidence that you’ll be fine. And if you get audited, they help you through the process. If the audit becomes complicated then Guidant has promised that they’ll give you access to the legal counsel you need to guide you through the audit as well.
Best,
Jeff
Noah Kelly
There was some trouble for Guidant back then. I would definitely seek out one of the other providers with a better track record and better google reviews.
Jeff White
Noah,
I’d love to see any proof you have of this so that we can inform our readers of any potential outstanding issues. They have been an outstanding provider for the small businesses we know of who have used them the last few years.
Best,
Jeff
Jayson
If your site is so unbiased …. why such a defense of Guidant?
Just read their google reviews. Remove all of,their friends and referral partners and it is not a good picture. Their last 10 reviews are at best 2 stars and tell a real story.
Jeff White
Hi Jayson!
Thanks for your question. Our site is unbiased towards choosing the best ROBS company. It’s our determination the at this point in time the majority of bad reviews related to any ROBS company are from individuals losing their retirement savings because their business failed. You should be well aware of the risks of a business before you get involved, especially if you’re throwing your retirement funds into that business. Very few businesses succeed compared to how many start so it’s important to have a solid business plan going in. The reviews based around the customer service have mostly been great for many of these ROBS providers. Remember that this isn’t al loan so there are no interest rates or negative terms that are going to impact you in the wrong way.
Best,
Jeff
Derrick
Here you go:
http://www.bluemaumau.org/6879/guidant_pulls_out_small_business_financing
Jeff White
Hi Derrick!
Thanks for sharing this article. I don’t think it shows any wrongdoing on the part of Guidant, from what I read. In fact, I think it shows how important it is to Guidant that they do everything the right way. Back when this article was written, ROBS were still very new in the eyes of the IRS, and they had just posted their rules regarding them. This was a time when the IRS was looking into how these plans were being marketed. I don’t have firsthand knowledge of Guidant, but it appears from the article that they were just wanting to be 100% sure they were in compliant with the IRS rules before they moved forward with helping their customers. I actually admire that.
Regardless, ROBS has since that time become a very recognizable financing option for entrepreneurs looking to take on additional capital in their business without taking on, and burdening their company with, additional debt. We consider it the best kept secret in financing, but that doesn’t mean it’s right for everyone. For those it is right for, however, Guidant continues to be a strong force in the industry as they close more ROBS every year than anyone else we’ve seen, and they do it with strong customer reviews.
Best,
Jeff