ROBS, or Rollover for Business Startups, is a program designed to help small business owners use their retirement accounts for business funding without accruing penalties. If you are a prime candidate for this type of business financing, use Pango Financial’s tips as you choose a ROBS service provider.
Choose an Experienced Firm
As you shop around for financial services for your business, prioritize experience. Ask each potential provider how many ROBS transactions their company performs every year and how long they’ve been in business. A firm that’s performed thousands of these transactions without issue is highly likely to know what they’re doing.
Look for Audit Protection
Small businesses that utilize 401(k) business financing via a ROBS are slightly more likely to be audited by the IRS or the DOL (Department of Labor). Choose a ROBS provider that offers audit protection. While you may be tempted to work with a provider with no audit history at all, that’s actually a sign of an inexperienced firm.
Read the Fine Print
Carefully read any paperwork you receive from a potential ROBS provider before signing it. Look out for hidden costs, and ensure that services like incorporation services, registered agent services and plan maintenance are all included in your ROBS pricing. A provider that also offers these services may stick with you beyond the initial rollover transaction.
Ask for a Clear Timeline
ROBS transactions have multiple steps and can seem overly complex. However, a high-quality firm can help you complete your rollover in three to four weeks. Ask potential providers when you can expect your rollover to be complete—a good ROBS provider will be honest and up-front with you.
Consider Ongoing Support
If you only want to use your ROBS provider for a one-time rollover transaction, that’s perfectly fine. However, if you’re new to running your own business, consider working with a firm that offers other financial services. You may be able to use their various funding solutions to grow your business further in the future.
As you shop around for financial services for your small business, consider choosing a ROBS service provider to help you roll your retirement funds into a new plan. Pango Financial’s tips aim to help you choose a provider that will support you throughout the ROBS process and beyond.
Curious about other financing options you may be able to use for your business? Head over to Pango Financial’s funding solutions tool to learn more about unique ways you can fund your venture.