If you at least $ 50,000 in a personal 401 (k) or other tax-deferred retirement account, and need money to finance a small business, this article is for you. We'll show you how to set up a ROBS (Rollover for Business Startups) with Guidant Financial , the leading provider of ROBS financing for small businesses.
Whether you're just starting out, keen to buy a business, or want to use a company you already have a ROBS can be a great solution. A ROBS allows you without investing your retirement money in your own business, to pay taxes or early withdrawal penalties.
in our products Read learn the following:
- Why Guidant
- How to Make a ROBS with Guidant set up (including acceptance criteria)
- how much it a ROBS with Guidant set
- to the advantages and disadvantages of a ROBS weighing
This article is specifically about how to set up a ROBS with Guidant. If you are not familiar with ROBS, read our Ultimate Guide to ROBS and come back to this article.
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Why Guidant?
Since 03, more than 11,000 small businesses have Guidant trusted to do a ROBS, more than $ 3 billion financing totaling.
In addition to the fact that they have set up as much experience in supporting small entrepreneurs a ROBS, there are three main advantages to using Guidant:
- Excellent Customer service - you are working one-on-one with a Guidant consultant during ROBS process set up. Many Guidant consultants banking experience, have worked for a small company or a small business in the past owned, so they can answer questions well equipped and simplify the process for you. [1945010[
- Higher Odds for economic success - a Guidant study showed that 81% of small business owners that a Guidant ROBS did after 4 years of success were compared with 39% of companies that used other methods of financing. Why? As a ROBS is not a loan, there is no debt or interest to pay back. As a result, that small businesses can ROBS more of their income to save
- access to independent counsel during the process to set up (no extra cost) -. Guidant is the only provider ROBS we know who has access to external independent consultant, at no extra cost, while ROBS set. Independent advice can help you objectively evaluate the legal and tax risks of ROBS and determine whether it is a good choice for your business.
To learn why we recommend Guidant and as to other ROBS providers out our guide to Best ROBS Provider compare.
How to Make a ROBS With Guidant Set Up
A ROBS You can bond funds invest in your business, without paying taxes or early withdrawal penalty (if under the age of 59 ½) you have to pay normally if money withdrawn from your 401 (k) or other tax-deferred retirement account.
ROBS funding can be used to start a new business or franchise to buy an existing business or franchise, or an existing business or franchise recapitalize. If you are planning to do this, your business should already be generating some income and have a clear path to profitability.
Here is a step-by-step preview of how to adjust to a ROBS with Guidant. While some of these steps look complicated, rest assured that the hard stuff is taken care by the professionals at Guidant. But it helps to understand the process, so we have given you an overview of how it works.
1. Determine whether you are a good fit for Guidant
You must first and foremost the three things for a ROBS with Guidant to come in the following question:
- a qualified retirement account. Guidant works with a wide range of retirement accounts, including following:
- 401(k)
- 403(b)
- SEP
- TSP
- Keogh
- Traditional IRAS (Roth IRAs are not eligible)
- at least $ 50,000 in your retirement account. Guidant recommends that you have at least $ 50,000 to rollovers because the upfront fees and ongoing monthly fees.
- Retirement Account not be , a power employer. Most employers prohibit from rolling over a retirement account while you are still working for them. If you keep your job plan during a business, you probably do not sponsored by that employer allows a retirement account rollover. However, you can use a retirement account from a former employer.
The good news about a ROBS that you do not meet traditional underwriting criteria. There is no credit check, for example, and you do not have to worry about collateral. Almost all sectors are entitled to a ROBS with Guidant to do except for law firms and medical practices, which are structured as professional companies.
2. Request a free Guidant Consulting
, you can request a free consultation with Guidant by click here .
3. Talk A Guidant financing consultants will be using a Guidant Consultant
call within one business day to ensure , you are a good fit for ROBS. If you qualify, the consultant will then arrange a time for an extended 45-minute conversation. If you want to move forward after this call, you are asked about your retirement plan and company. This is basic information no heavy documentation required as the following screenshots show.
4. Pay ROBS fees
payment due at this time. They are required to pay the $ 4,995 setup fee and the first monthly fee of $ 119th If you later decide that ROBS is not for you, Guidant is a generous offer money-back guarantee . They are, with the exception of fixed costs, such as attorney time and corporate registration fees refunded, which are deducted from the refund, should you decide to cancel the operation. Robert newcomer Dyer, Sales Manager at Guidant, says about 20% of total costs are usually deducted when the customer applies for a refund.
5. Guidant Sets a C Corporation and files IRS paperwork for you up
order has ROBS your business do, as a C-Corporation to be set up, because the roll includes a sale of shares. Guidant is the necessary documents with your state to set as a C Corp submit your company (if it is not already structured as a C-Corp). They are also required documents with the IRS.
6 file. Get questions and answers of two independent ERISA Lawyers
Guidant is the only ROBS provider, we know what gives you access to an independent lawyer while robbing establish what gives you an opportunity to ask questions and to evaluate whether a ROBS a good fit for you. They are two and a half hours consultations with independent ERISA lawyers who, at no extra cost to you. ERISA or Employee Retirement Income Security Act, the law that regulates ROBS. Some questions that lawyers have to be made:
- Do I faced an increased audit risk when I do a ROBS
- What happens ? , if a test?
- How much content do I have to pay me when I make a ROBS?
- How many hours I have to work, if I make a ROBS?
- are to buy my employees to be able to camp in the business?
- is my company must be evaluated before storage can be granted?
- What will happen to the company retirement account, if the business fails?
In rare cases, the independent Council to discover something about your business or retirement account, which invalidated the deal. In this case, you would get a full refund, says Dyer.
7. A new Retirement Plan is If you do a ROBS to society Created
, a new 401 (k) or profit sharing pension plan created under the C-Corporation. Guidant employees will help design the company pension scheme. It must be open to all eligible employees. The plan is from a third party company like Merrill Lynch or TD Ameritrade.
instead. 8 Guidant Monitors prolongation and Stock Purchase and receive financing for small enterprises
The final step of ROBS is the turnover of funds. Your personal retirements are transferred to the company pension scheme. Your company pension then purchases the company's shares in the Company. From the proceeds of the share purchase, you may want to start a new business, buy a business, or recapitalize an existing business.
How much does it cost a ROBS up with Guidant?
There are two main generated fees for the establishment of a ROBS with Guidant:
- Upfront Set up fees of $ 4995
- Ongoing monitoring fees of 119 $ / month (covers 10 employees $ 3.33 / month for each additional employee to 10)
While these fees actually a prolongation for business startups with Guidant up setting much more economical than always a small business loan like may seem high. Business loans are debts that you have to pay back, with interest, little by little each month. Debt service, as this is called, can take out of your business sales a great deal. In contrast, a ROBS is not a loan. There is no debt or interest to pay back so that your small business retain more profits.
Below, a comparison is that Guidant has that in comparison to other types of financing at the expense of ROBS looked for $ 125K in business capital. As you can see, the monthly payment for a Guidant roll is only for a company of 10 persons $ 119th That is less than 1/10 of the monthly payment on an SBA loan!
There are to pay back any debt or interest, and as your business grows, the stock, which also grow in your company sponsored retirement account is , That translates to more pension for you.
So it's too good to be true? Well, just like any other business financing option ROBS has its own share of pros and cons, which we cover in detail in the next section.
weighing the pros and cons of a ROBS
Whether you Guidant or another company that you help to set up a ROBS, the risks similar. The biggest risk, of course, is the loss of your pension fund if the company fails. This is a scary "what if", but the thing that many people forget is that the risk of entrepreneurship is regardless of how you finance your business. For example, if you get a business loan, you have to sign a personal guarantee, as a rule. If the business fails, you could lose your home and assets.
As with any other kind of corporate finance , we recommend balancing the pros and cons of ROBS before deciding whether it is for you the right choice is. Take a look at our Ultimate Guide to ROBS for a more thorough discussion of the pros and cons of ROBS.
Pros of a ROBS .:
- There were no income taxes or early withdrawal penalties
- business is rich in cash ROBS. A is not a loan, so you do not incur debts and pay interest. This means that the company more profits.
- Better success rates. reserves Based on data from Guidant, funded enterprises of ROBS have a 81% survival rate after 4 years, compared to 39% for most companies, in part because more business income can rather reinvested in the business be used as a wipe debt.
- No credit check / personal guarantee. - If you do a ROBS, it's no credit check and no personal guarantee . If the business fails, you will lose what you have invested, but it will not affect your personal credit score or other personal assets be.
- can grow Retirement Fund in a tax -advantaged account. If your business does well, the will of the company retirement account owned stock grow. These agents can be used to retire
disadvantages a ROBS .:
- possibility of business failure and the loss of pension funds. If the business fails, then you could lose all the money invested.
- Increased risk of audit. The IRS or Department of Labor is more likely to monitor companies that have used ROBS. The risk is very low (only about 0.25% of Guidant plans are before an exam), but if you get hurt any rules, you may have to pay penalties. Fortunately, Guidant will try to ensure that what are all consistent. They also offer the most generous audit protection in the industry and will pay for your examination.
- must manage a pension plan. If you do a ROBS you are planning retirement provided the administrator of a company. You need to plan to employees on the market and tell them how to enroll, to take time away from your business. Guidant will however help you with plan administration.
- must operate as a C-Corporation . ROBS creating a C Corporation. Many small businesses prefer the simplicity and control advantages of LLC or partnership instead of a corporation.
to determine the best way, if a ROBS is the right choice for you to talk to a professional ROBS company as Guidant . Your finance consultants small business experts, and access to an independent lawyer to discuss the risks of ROBS with you in detail.
For Richard Hoad and his wife Jo-Anne, owner of The Parsonage Inn in Cape Cod, Massachusetts, is worth the risks were. The Hoads has to reach a ROBS with Guidant in 2012 their dream of owning a B & B.
Richard said: " My wife and I were relatively confident because the inn was already as a business It was underperforming, but Jo-Anne's family had a. B & B run in the past, so we knew what was involved and how we were able to make it successful. we put all our eggs in one basket, but the economy began to grow, we got the inn at a good price, and we knew what we could do to be successful. "Four years later, the Hoads have almost doubled the revenue Inn.
Jo-Anne and Richard Hoad, co-owner of the Parsonage Inn in Cape Cod, MA. The Hoads used Guidant a ROB or rollover for business startups set
Richard had to offer a few words of advice for other small businesses that can draw a ROBS into consideration. "Look at your business plan, make it realistic to see what you want to do with the business, and make sure that you can achieve it. If the fundamentals of the company are strong, and you are confident about you do to be able to add value, is what is important. "Richard also recommends entrepreneurs to use the services of a professional company like Guidant that it will go through the process. "Guidant was very professional and helped us to achieve our goals, and they continue to do so to this day."
Bottom Line
If you have difficulty funding was found for a small business, a ROBS with Guidant do just be the solution could. A ROBS you can actually increase your chances for economic success, and we recommend Guidant for their excellent customer service and access to independent advice. All in all, simplified Guidant, which can be a rather complicated process. Go to Guidant today the establishment of a ROBS, so you can focus on what matters most: your small business
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