How to Choose the Right ROBS Funding Provider

Post Date: July 24, 2019

If you’ve decided that a Rollover as Business Start-Ups (ROBS) strategy is the right way to finance your new business, congratulations!

You’re already aware of the benefits of using a ROBS plan to give you fast access to the funds you need to open the doors for your company. Now comes the next challenge: how to choose the right ROBS funding provider.

Fortunately, by taking a close look at some of the approaches and services a ROBS provider offers and asking the right questions, you’ll be well equipped to make a smart choice.

What to Look For in a ROBS Provider

Here are some considerations when looking at companies that support 401(k) business funding:

    • Pricing. You have plenty of cost considerations when starting a new business. The costs to set up the ROBS should not break the bank. While prices vary, you will want to be sure that the initial fee paid covers the cost to complete and file all the paperwork to finance your company.  There will also be ongoing monthly maintenance fees, to cover the cost of keeping the plan in compliance, with required filings and documentation.
    • Experience and Expertise. You want a ROBS provider that has extensive experience and knowledge of business financing. Benetrends is the original source of ROBS funding and for over 35 years has helped more than 17,000 owners launch their businesses.
    • Education and Information. Financing your business is a big deal, and using a ROBS strategy means following specific guidelines. Be sure to work with a ROBS provider that takes the time to explain how your business needs to be structured, how funds are withdrawn and deposited, what to do to purchase shares and can give you a timeline of when you’ll have access to funds.
    • Excellent Service. Do your research.  Ask any potential ROBS provider for references from other companies like yours. Ask those references about how responsive the provider is to questions, how they support your account and how often they reach out to their customers. Read online reviews and check their rating with the Better Business Bureau. The answers will provide you with insights that can help you choose which providers are right for you.
    • Ongoing Support. A ROBS strategy is not a one-time occurrence. You want a ROBS provider who supports the ongoing needs of reporting and record-keeping for your new company’s retirement plan. Ideally, you’d also select a company that offers supplemental services for your new company, such as credit card processing and business insurance coverage.

What To Ask ROBS Providers

You’re about to make a deal to establish one of the most important partnerships for your new business. That means asking questions that will give you a better understanding of the provider and their approach. Consider asking the following:

    • How much experience does your company have with ROBS financing?
    • What is included in your costs?
    • Do you offer audit protection?
    • How many of your customers have been audited after using the ROBS approach? What were the outcomes?
    • What process do you use and what’s the timeline for each step?
    • What type of ongoing support is provided for the retirement plan?
    • What other services does your company provide?

We have the answers to all these questions and more. At Benetrends, small businesses are our business. To learn more, watch the webinar: How To Use Your Retirement Funds To Buy A Franchise Or Business.

ROBS Funding Guide
Categories: Blog | ROBS

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