IRA/401(k) Business
Financing FAQs

Frequently Asked Questions

The ROBS structure isn’t new — in fact it’s been an option for years — but many financial advisors and stock brokers aren’t aware of these investments because they don’t provide sufficient profit for their institutions.
Not at all. The Employee Retirement Income Security Act of 1974 (ERISA) passed the responsibility of retirement saving from the employer to the employee.
Yes — in fact, as part of this process, you’ll need to be an employee of your new business, providing a bona fide service. This not only gives you the ability to draw a salary, but actually requires you to do so. You shouldn’t draw compensation from the proceeds of the employer stock purchase; rather your compensation should come from operational revenues generated after your company opens for business and is actively engaged in the buying or selling of goods and/or services.
You can purchase almost any legal business or franchise, whether you’re starting a new venture or buying an existing business. One exception is using ROBS to create a business deemed to be “solely the investment of capital” (such as creating a business where you’d be loaning your retirement funds to others).
Guidant’s ROBS structure exclusively utilizes a C Corporation (C Corp.) business structure to meet the compliance requirements of ERISA and Internal Revenue code.
The term Double Taxation refers to taxation that occurs on dividends paid by the C Corp. Many times these taxes can either be avoided or mitigated. A qualified tax professional should be able to assist you in optimizing your tax plan. Paying taxes when you take a distribution from your retirement plan, however, can never legally be avoided.
Any employee that meets all of the eligibility guidelines for the 401(k) Plan must have the option to participate in the Plan.
For the 2015 tax year, the maximum contribution that you can make to your new 401(k) Plan is $18,000. If you’re over the age of 50, you may also contribute a “catch-up” contribution of up to an additional $6,000.
Yes; the exemption to “prohibited transactions” permits participation by any friends or family members.
Yes; with ROBS, you can combine funds with a business partner or a spouse to produce the necessary capital to start your business.

If you’re starting a brand new business or franchise, or buying a business on an arm’s length basis from an informed and uncompromised third party, you probably won’t be required to get an appraisal.

If you’re purchasing an existing business or franchise, it’s prudent, with or without retirement funds, to get an appraisal. If you’re using ROBS to recapitalize an existing business that you own, you’ll need to get a business appraisal.

You can also combine Rollovers for Business Start-ups with other solutions.

SBA Loans

Get up to $5 million in capital for your business with an SBA loan.

Portfolio Loans

Take advantage of this securities-based credit line option that has zero credit requirements.

Unsecured Loans

Utilize this fast method of funding, which requires no collateral to qualify.

Equipment Leasing

Avoid the hassle of purchasing equipment for your business and enjoy the flexibility of leasing.

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