6 Best Rollover for Business Startups (ROBS) Providers for 2023
This article is part of a larger series on Business Financing.
A rollover for business startups (ROBS) gives you tax and penalty-free access to your retirement accounts to fund a business venture without taking out a loan. The best providers should be able to complete the rollover process for you quickly and accurately while providing resources during all stages of the transaction. This includes ongoing support and protection to ensure your company stays compliant even after the initial setup is finished.
Here are the six best ROBS providers:
- Guidant Financial: Best overall for customer service, legal, and audit support
- Benetrends Financial: Best for quick setup and access to funds
- IRA Financial: Best for lowest fees
- MySolo401k: Best for small businesses with fewer retirement plan participants
- FranFund: Best for franchises
- Pango Financial: Best for simple ROBS transactions
Minimum Balance | Setup Fee | Monthly Maintenance Fee | Funding Speed | Legal Support | Audit Protection | |
---|---|---|---|---|---|---|
|
$50,000; flexible |
$4,995 |
$149 |
3 weeks |
Yes, internal and external |
Yes |
Visit Guidant Financial | ||||||
|
$45,000; flexible |
$4,000 to $5,000 |
$145 |
As soon as 10 days |
Yes |
Yes |
Visit Benetrends Financial | ||||||
|
No set minimum |
$2,500 |
$100 |
2 to 3 weeks |
Limited |
Yes |
Visit IRA Financial | ||||||
|
$30,000; flexible |
$3,000 |
$75* |
2 to 3 weeks |
Limited |
Yes |
Visit MySolo401k | ||||||
|
$50,000; flexible |
$4,795 |
$145 |
10 to 20 days |
Yes |
Yes |
Visit FranFund | ||||||
|
$25,000 |
$3,995 |
$110 |
2 to 3 weeks |
Yes |
Limited |
Visit Pango Financial |
*Maintenance fee is waived for your first year and is billed at a rate of $899 annually beginning your second year. The fee covers up to 10 plan participants; $75 per additional participant.
Guidant Financial: Best Overall for Customer Service, Legal & Audit Support
What We Like
- Will cover all associated costs if your company is audited
- Free access to legal counsel for guidance on taxes and other money-saving strategies
- Excellent customer service for different types of businesses, including franchises
What's Missing
- Highest upfront fee out of the providers on our list
Features
- Initial setup fee: $4,995
- Monthly fee: $149
- Minimum balance to start a ROBS: Flexible, but generally $50,000
- Funding speed: Three weeks
- ROBS services: Creation of C corporation (C-corp), retirement plan, plan management, audit protection, internal and external legal counsel, and reporting and compliance reviews
- Additional services: Small Business Administration (SBA) loans, unsecured loans, equipment leasing, portfolio loans, and growth capital loans
Why We Like Guidant Financial
Guidant is our pick as the best overall ROBS provider because of the resources and support it offers throughout the process. The company provides a satisfaction guarantee, audit protection services, ongoing plan management, and internal and external legal counsel.
It also provides a free consultation session to help determine if a ROBS is right for you. If it is, Guidant will not only walk you through the entire process from start to finish but can also provide ongoing support to ensure continued compliance.
Among its ROBS services, Guidant will handle C-corp creation, set up its retirement plan, provide ongoing support to ensure compliance with regulatory requirements, and offer ongoing annual meetings with external legal counsel free of charge. The meetings can be combined with the company’s network of internal legal counsel to assist you in the event of an IRS audit.
However, it’s important to note that contrary to what many believe, IRS audits are rare, even with a ROBS transaction. If they do happen, Guidant Financial will pay for 100% of the costs associated with any audit that the IRS or United States Department of Labor might conduct.
You can begin the application process from Guidant’s website or call its toll-free number with any questions you may have. Visit Guidant Financial’s website to apply.
Benetrends Financial: Best for Quick Setup & Access to Funds
What We Like
- Can provide you access to funds within 10 business days
- Discounts available for veterans
- Monthly fee covers a wide range of services, including compliance testing and preparation of tax forms
What's Missing
- High upfront fee that can vary depending on your specific business
Features
- Initial setup fee: $4,000 tp $5,000 ($500 discount available for veterans)
- Monthly fee: $145
- Minimum balance to start a ROBS: $45,000–$50,000
- Funding speed: As soon as 10 days
- ROBS services: Creation of C-corp, retirement plan, plan management, administrative support, audit protection, legal counsel, and reporting and compliance reviews
- Additional services: Startup loans, SBA loans, lines of credit, equipment leasing, and capital financing
Why We Like Benetrends
We chose Benetrends as the best ROBS provider for business owners looking to get access to cash as quickly as possible. It offers access to funds in as soon as 10 days while other providers on our list can take up to three weeks.
It has a strong track record of conducting ROBS transactions that are fully compliant with IRS and Department of Labor requirements—it has never had a plan out of compliance in over 40 years. It also offers audit protection services and uses its own internal team of certified and licensed professionals.
It charges a one-time fee of anywhere from $4,000 to $5,000, depending on your specific business, and works primarily with franchises but can also help other business owners. Once the ROBS transaction is complete, you will have to pay a recurring monthly fee of $145, which covers services, such as the preparation of tax forms, compliance testing, annual business valuations, audit protection, and other items to maintain regulatory compliance.
Check out Benetrends Financial’s website to learn more about the program, schedule a free consultation, or apply.
IRA Financial: Best for Lowest Fees
What We Like
- Lowest set-up fee out of all of the providers in our guide
- Low monthly maintenance fees
- No minimum amount required for a rollover
What's Missing
- Requires an upfront deposit
- Limited in other types of funding
- Access to legal counsel not as strong as other providers
Features
- Initial setup fee: $2,500 ($500 deposit required)
- Monthly fee: $100
- Minimum balance to start a ROBS: None
- Funding speed: Two to three weeks
- ROBS services: Creation of C-corp, retirement plan management, record-keeping, retirement plan compliance services, tax form preparation, and audit protection
- Additional services: Self-directed individual retirement account (IRA), Solo 401(k), and SBA loans
Why We Like IRA Financial
IRA Financial is our pick as the best ROBS provider for the lowest fees. The company charges the lowest setup fee out of all our providers listed here at just $2,500 and a low $100 monthly maintenance fee, regardless of your company’s size.
To start the process, IRA Financial requires an initial deposit of $500. The final payment of $2,000 is due once the ROBS has been completed. While most other ROBS providers require the setup fee to be paid separately from the ROBS funds, IRA Financial allows the remaining $2,000 balance to be paid using retirement funds from the business as a tax-deductible business expense.
Since the company’s fees are lower, it is willing to work with businesses looking to complete smaller rollover amounts. If a rollover is too small in relation to the fees being charged, IRA Financial could advise you to consider alternative funding sources, such as SBA loans. Depending on your circumstances, you might end up saving money by withdrawing directly from your retirement accounts and paying the taxes and early withdrawal penalties.
You can head to the IRA Financial website to learn more about the program. Online chat is available, and you can also call the company’s toll-free number. Visit IRA Financial’s website to apply.
MySolo401k: Best for Small Businesses With Fewer Retirement Plan Participants
What We Like
- Charges low upfront and monthly fees compared to many other providers on our list
- No fees for the first 12 months
- Flexible in considering ROBS for those with smaller retirement balances
What's Missing
- Support from legal team may not be as strong as other providers on our list
- Monthly fees can be expensive for plans with a large number of participants
Features
- Initial Setup Fee: $3,000
- Monthly Fee: First year free; $899 for up to 10 plan participants thereafter, $75 for each additional participant
- Minimum Balance to Start a ROBS: No set minimum, but generally $30,000
- Funding Speed: 2–3 weeks
- ROBS Services: Creation of C-corporation, retirement plan, ongoing compliance support, retirement plan management, preparation of required tax forms, audit protection
- Additional Services: Solo 401(k), IRA LLC, SBA loans, equipment financing, commercial real estate loans
Why We Like MySolo401k
MySolo401k’s pricing structure makes it very cost-effective when you have fewer than 10 participants in your retirement plan. The annual fee of $899, which is waived your first year, gives you support and services for up to 10 plan participants. Additional participants cost $75 annually.
With an annual fee that comes to slightly less than $75 per month, MySolo401k is one of the least expensive of the providers on our list. In exchange for this fee, you’ll get services that include the preparation of required tax forms, completion of an annual business valuation, and management of the retirement plan.
One possible drawback is the fact that while MySolo401k does offer audit protection services, it is more limited compared to many other providers. Although highly qualified, it only advertises the availability of a single compliance officer and one Harvard law attorney to provide you with audit assistance.
MySolo401k can also help with other types of financing, including SBA loans, equipment financing, and commercial real estate loans.
Applications can be submitted through the lender’s website, where you can also find resources for educational content and access to a daily live video call. Visit MySolo401k for more information.
FranFund: Best for Franchises
What We Like
- No compliance issues in more than 16 years of operation
- In-house staff and legal counsel for audit support
- Faster access to funds than many other providers on our list
What's Missing
- Not as flexible on the minimum $50,000 balance required for a ROBS
Features
- Initial setup fee: $4,795 (discounts available for veterans)
- Monthly fee: $145
- Minimum balance to start a ROBS: $50,000, somewhat flexible
- Funding speed: 10 to 20 days
- ROBS services: Unlimited consultations with a plan specialist, creation of the C-corp, retirement plan, corporate bank accounts, and issuance of stock certificates
- Additional services: SBA loans, secured loans, unsecured loans, equipment leasing, business insurance, payroll services, payment processing, and doing-business-as (DBA) filing
Why We Like FranFund
We chose FranFund as the best ROBS providers for franchises. The company has roots in funding franchises and can provide business owners with access to funds quickly and efficiently.
In more than 16 years of business, it has never had a compliance issue. Business owners that use the company for a ROBS also have less than a 1% audit rate. If you are selected for an audit, you will have the full support of the FranFund team, including its tax attorneys and other in-house staff.
As part of the ROBS process, it offers an unlimited number of consultation sessions with a specialist. In addition to helping you complete the initial rollover, you’ll receive ongoing support to ensure your plan remains compliant each year.
FranFund generally requires you to have at least $50,000 in your retirement accounts. Otherwise, it may recommend other sources of funding, including the possibility of simply paying taxes and early withdrawal penalties on your retirement accounts if it ends up being less expensive.
Other products offered by FranFund include SBA loans, equipment leasing, payroll services, payment processing, and business insurance.
FranFund allows you to schedule a free consultation through its website. You can also begin the process by submitting an application. Visit FranFund’s website for more.
Pango Financial: Best for Simple ROBS Transactions
What We Like
- Willing to work with smaller transactions
- Offers a money-back guarantee
- Affordable monthly maintenance fee
What's Missing
- Audit support may be limited to assisting your CPA with ROBS-related questions
Features
- Initial setup fee: $3,995 (veterans receive a 20% discount)
- Monthly fee: $110
- Minimum balance to start a ROBS: $25,000
- Funding speed: 2–3 weeks
- ROBS services: Creation of C-corp, retirement plan management, annual business valuation, and preparation of required tax forms
- Additional services: SBA loans, lines of credit, invoice factoring, bank loans, and equipment financing
Why We Like Pango Financial
Pango Financial is best for businesses with simple ROBS transactions. Compared to the other providers in this guide, it may not provide as many resources in the event of an audit. However, the comprehensiveness of its other products and services, low fees, and willingness to work with smaller rollover amounts make it a good choice.
If you are audited by the IRS, Pango Financial offers audit support by assisting your certified public accountant (CPA) with any questions. You’ll be expected to take the lead, so while you will have access to its experts, you will need to make sure that your own company’s CPAs have a good understanding of how to navigate an IRS audit. This is especially important if your ROBS was used to fund a business with a complex operating or tax structure.
Pango Financial charges a one-time setup fee of $3,995 with a monthly maintenance fee of $110. This covers the creation of a C-corp, annual required business valuations, registered agent services, retirement plan management, preparation of required tax forms, and more. Veterans receive a discount of 20%.
In addition to a ROBS, you can look into the company’s other products, which include SBA loans, business lines of credit, invoice factoring, and equipment financing.
To learn more or to apply, visit Pango Financial’s website.
How We Chose the Best Providers
When evaluating the best ROBS providers, we considered the following criteria:
- Speed of application and funding process
- Quality of audit protection services
- Availability and ease of access to legal counsel
- Presence of satisfaction or money-back guarantees
- Track record of compliance with regulatory requirements
- Ongoing compliance support
- Minimum required amounts for a rollover
- Fees charged
- Customer reviews
Alternatives to a ROBS
A ROBS is a great way to avoid borrowing money by using your 401(k) to fund a new business. However, there are other ways to get funding that won’t directly put your retirement funds at risk in the event of a business failure. While you will have to pay loan fees and interest charges, here are some other small business loan options that can still offer low rates:
- SBA loan: A good choice for businesses that have good credit and don’t require cash quickly. You can contact SmartBiz to discuss your options.
- Business line of credit: Ideal for businesses that don’t require a large amount of cash. It isn’t uncommon for banks to offer an introductory 0% interest rate for a limited time.
- Personal loan: With good credit, you can obtain a personal loan for business purposes up to $50,000 in funds. You can contact LightStream to discuss your funding options.
Frequently Asked Questions (FAQs)
What is a ROBS?
A ROBS, short for rollover for business startup, allows you to access the cash in your personal retirement accounts tax-free and penalty-free to fund a new or existing business venture. You’ll typically need at least $50,000, and most personal retirement accounts are eligible.
What if I do a ROBS but change my mind about starting a business?
You may have to pay taxes and early withdrawal penalties if you complete a ROBS but end up not using the funds for a qualifying business venture. If you’re concerned this might happen, you can consider other types of startup business loans instead.
What happens to my ROBS if I sell or close my business?
To avoid taxes or penalties, you must take a few extra steps to properly close out your ROBS. Typically, business assets or stock are sold, after which the proceeds are used to pay company debts. The remaining funds are then distributed to shareholders. Once complete, the retirement plan is closed, and a final tax form 5500 is filed with the IRS.
Bottom Line
If you’re a business owner looking to fund your business without borrowing money, then you’ll be in good hands with any of the ROBS providers mentioned in this guide. They have strong track records of completing the process without having any compliance issues and provide you with audit support should it ever be needed. Every business is unique in its goals, so you should speak with multiple companies to be sure you’re partnering with the best ROBS provider for your needs.