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Business Funding IRA Qualification

The Business Funding IRA or ROBS plan is available for a wide variety of businesses.  Over the years, we have helped folks use this program for some of the following purposes:

  • Purchase of franchises, such as restaurants, carpet cleaning, and tax filing services
  • Real estate development and construction
  • Insurance agencies
  • Physical fitness studios
  • Professional services such as CPA, legal, engineering, or medical firms
  • Manufacturing businesses
  • Specialty food or beverage production
  • Car washes and other automotive services
  • Retail businesses
  • Courier delivery routes (UPS & FedEx)
  • Private mail box services
  • Technology start-ups

… And a whole lot more.

New and Existing Businesses

The Rollover as Business Startup strategy may be used to start a new venture, acquire an existing business, or expand an already operating enterprise.

Active Businesses Only

In order for the Business Funding Structure to work, there must be an operating business formed as a subchapter C corporation.  While this business can be in a wide array of fields, it must be an active business providing a product or service.

To try and use the Business Funding IRA structure around a passive income producing activity would either be tax-foolish or potentially non-compliant.  While it may be possible to form a corporation to provide property management services to your own portfolio of rental properties, it simply does not make sense to hold those properties in a C Corporation.  To do so would be to give up many of the inherent tax-sheltering benefits of passive real estate holdings.

Partners and Employees

If your business has partners or employees, they may need to be provided access to the benefits of the company retirement plan.  Any employee of the corporation working more than 1,000 hours per year must be offered plan participation, including the opportunity to participate in the ESOP.

Is A Business Funding IRA Right for Your Business?

If you have an interest in using retirement funds to capitalize your own business, please feel free to Contact Us.  At Safeguard Advisors, we’ve been helping clients self-fund their business ventures using retirement funds since 2005.  Over the years we have accumulated a good bit of expertise, and are happy to share that with you as you evaluate your options.