Using ROBS Plans for SBA Financing in 2020
A ROBS (Rollover As Business Start Up) Plan is a self-directed 401(k) plan that allows individuals to access retirement funds tax and penalty free if they are being used to buy, start, or recapitalize an active business.
IRS recently made a bold statement that businesses that have a ROBS plan attached fail more than businesses which do not.
SBA Researched the ROBS issue and found the following:
- i. There was no designation within ETRAN or SBAONE to flag these as ROBS deals.
- ii. SBA is not aware of the volume of ROBS deals being done.
- iii. Lenders don’t know if there is a ROBS involved in the deal.
- iv. SBA feels the IRS may be causing these failures if the borrower drops out of compliance with their plan and are penalized.
- v. SBA is concerned the borrower is not being educated on the “strings attached” with having a 401k plan as a shareholder in their business.
- vi. Currently wording in the SOP may be confusing but SBA reads it as loans with ROBS attached must go to the center for processing and cannot be processed under the PLP designation.
- vii. They have time to write a final decision (GP vs PLP) and insert the language in the new SOP slated for 2020.
- Qualified Employee Trusts (ESOP)
- §120.350 Policy.
- §120.351 Definitions.
- §120.352 Use of proceeds.
- §120.353 Eligibility.
- §120.354 Creditworthiness.
Register Using this Login Link:
Using ROBS Plans for SBA Financing in 2020
Tue, Dec 10, 2019 2:00 PM – 3:00 PM EST
https://global.gotowebinar.com/register/488065547
Dial +1 (562) 247-8422
Access Code: 343-170-287
Webinar ID: 488-065-547
If you’d like to learn more about using retirement funds tax and penalty free in conjunction with an SBA loan please contact Suzy Granger at 281-954-6023 or suzy@drdacpa.com.
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Bob Coleman, Publisher, Coleman Report
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Suzy Granger, National Business Development Officer, DRDA
Suzy Granger assists small business owners by helping them access funds in their qualified retirement plans WITHOUT taxes or penalty in order to purchase, start, or recapitalize a business. Her referral network includes business brokers and SBA Lenders. Suzy welcomes opportunity to add you to that network.
Bob Coleman is the Author of “Money Money Everywhere and Not a Drop for Main Street.” He is the Publisher of the Coleman Report, a trade newsletter and website for SBA and small business lenders. He produces online training videos and webinars for small business lenders to teach them to make less risky loans to Main Street.
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