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
Guidant 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
|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.|
|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.
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 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. For more information, you can read our review of Guidant Financial.
How to Apply With Guidant
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.
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 has two main costs with a ROBS transaction:
- Setup Fee: $4,795, $3,995 for Veterans
- Ongoing Maintenance Fee: $130 per month
FranFund is the most affordable ROBS partner, carrying the lowest setup fee and ongoing maintenance costs of any of the providers we’ve reviewed.
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. For more information, you can read our review 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
Benetrends 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 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 Offers
Benetrends has never had a 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.
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.
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. For more information, you can read our review of Benetrends.
How to Apply With Benetrends
You can apply online for a free consultation with Benetrends to make sure a ROBS 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 (excluding the veteran discount at FranFund), and they waive your maintenance fee for the first year. They 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.
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
MySolo401k focuses exclusively on retirement plans, and a ROBS is the only financing they offer. Instead, you can work with them to set up a solo 401k or Self-Directed IRA. They also partner with a third-party lender who offers SBA loans, but you’ll work with both businesses independently.
MySolo401k has two main costs with a ROBS transaction:
- Setup Fee: $4,000
- 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 is Missing
MySolo401k offers a nice ROBS option, but they lack additional financing options. If you’re looking to combine your ROBS with an SBA loan or a different loan from a single provider, then this isn’t the right fit. To learn more you can read our review 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 your 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.
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. Check out our review 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.
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.