Best Ways to Fund a Small Business Startup Include Retirement Savings Without a Loan
SIOUX FALLS, S.D. – October 7, 2026 – Many first-time founders don’t have the collateral or track record lenders want; IRA Financial says one of the best ways to fund a small business startup is a Rollover for Business Startups (ROBS), which lets entrepreneurs move eligible 401(k) or IRA savings into their own company without taxes, early withdrawal penalties, or monthly loan payments.
IRA Financial was founded in 2010 by tax attorney Adam Bergman, Esq. In 2008, while researching retirement options for a client, he spent about two hours in a law library and found that the tax code gives retirement savers far more freedom than most custodians ever mention. ROBS is one of those options. It rests on long-standing exemptions in the Internal Revenue Code and ERISA that allow a qualified retirement plan to buy stock in its sponsoring employer. The IRS has stated that ROBS arrangements are not considered abusive tax avoidance transactions, though it expects them to be run carefully.
The structure works in a set order. The founder forms a C corporation, and the corporation adopts a new 401(k) plan. Eligible savings from a traditional IRA, SEP IRA, SIMPLE IRA, old 401(k), or 457(b) plan are rolled directly into that plan; Roth IRAs aren’t eligible. The plan then buys newly issued stock in the corporation, and the company uses that cash for startup costs, payroll, inventory, equipment, real estate, or franchise fees. Unlike a Self-Directed IRA investment, the owner can work in the business and draw a salary. The plan has to stay compliant after that. The IRS requires a Form 5500 every year, with no small-plan exception for a ROBS, and the company stock has to be valued annually.
Retirement money can back a startup from the investor side too. IRA Financial client Danny used a Self-Directed IRA to put $5,500 into a startup, and that stake grew to $13.5 million. A ROBS applies the same idea to a business the account holder runs personally, not one they invest in from the sidelines.
“The mistake I see most is founders treating a ROBS like a one-time transaction,” said Adam Bergman, Esq., founder of IRA Financial. “The rollover is the easy part. The plan has to file every year, the stock has to be valued every year, and the 401(k) has to be open to your employees once you hire. Skip those steps and a perfectly legal funding strategy can turn into a taxable distribution.”
Entrepreneurs can learn more at irafinancial.com. IRA Financial’s ROBS service costs a flat $3,500 to set up and $1,200 a year, with no commissions and no fee tied to the amount rolled over. Investors who want to back someone else’s startup can use a Self-Directed IRA for a flat $495 annual fee.
About IRA Financial
IRA Financial is a Self-Directed IRA, Solo 401(k), and ROBS provider founded in 2010 by tax attorney Adam Bergman. Its mission is to give investors direct control over their own retirement savings, including the freedom to put that money into a business they build or into real estate, private equity, cryptocurrency, precious metals, and other alternative assets that traditional brokerage accounts don’t offer. IRA Financial now serves more than 27,000 clients nationwide with over $8 billion in assets under administration and a 97% client retention rate. Learn more at irafinancial.com.
This release is for informational purposes only and does not constitute tax, legal, or investment advice. Readers should consult a qualified professional before using retirement funds to start or buy a business.
Media Contact
Company Name: IRA Financial
Contact Person: Tony Unkel
Email: Send Email
Address:5109 S Broadband Ln
City: Sioux Falls
State: SD
Country: United States
Website: https://www.irafinancial.com/
