There’s no doubt about it—securing funding to start a new business or franchise can be challenging. However, one funding option that many franchise owners have found success with is utilizing retirement funds to start a business (sometimes called 401(k)/IRA Rollover Funding or ROBS: Rollover as Business Startups). Many popular plans that qualify for this type of funding include: 401(k), IRA, 457(b), 403(b), PSP, SEP IRA, and more. (Roth IRAs are ineligible.)

To help you better understand why this is so popular with franchise owners, here are a few of the benefits of using this method to fund a franchise or small business:

  1. FINANCIAL BENEFITS: There are no taxes or penalties since the funds are being rolled over from one retirement plan to another. It’s also a debt-free and interest-free funding option so you can start your franchise cash-rich, plus pay yourself a salary during startup.
  2. FAST AND FLEXIBLE: When you use your retirement funds to purchase a business, you can secure funding fast (typically 18 business days or less). It’s also flexible – you can use it as the sole method of funding, or if you prefer, you can use it to meet the equity injection requirement for an SBA loan.
  3. EXIT STRATEGIES: Personal business asset appreciation upon sale can be subject to significant consequences. But when you use your retirement funds to start a franchise, you can save hundreds of thousands of dollars in taxes since any appreciation can be moved directly into your retirement plan and protected – often for the rest of your life (and your spouse’s life, or be used PRETAX to buy a bigger/better business).

As you can see, there are several advantages to this type of funding. To learn more about this and other funding options available to start a franchise, visit https://franchise.org/benetrends-financial-supplier. 

Benetrends is the authority in franchise funding, acclaimed for its Rainmaker Plan which enables entrepreneurs to use their retirement plan to purchase a business, tax deferred and penalty free. Benetrends has an industry high approval rating in SBA Loans and offers a full suite of business solutions including funding, commercial insurance, health insurance, payroll and more. 

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