{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/are-funds-from-a-roth-ira-eligible-for-my-equity-injection-if-rolled-over-via-a-rollover-a","api_url":"https://dealroom.so/api/public/questions/are-funds-from-a-roth-ira-eligible-for-my-equity-injection-if-rolled-over-via-a-rollover-a","question":"Are funds from a Roth IRA eligible for my equity injection if rolled over via a \"rollover as business startup\" (ROBS) plan?","topic":"Down payment & equity injection","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, funds from a Roth IRA (or other retirement accounts) can be used for equity injection through a compliant Rollover as Business Startup (ROBS) plan, but it's a complex process.","rule":"A ROBS plan allows individuals to use retirement funds to capitalize a new business without incurring taxes or penalties, by rolling them into a new C-corporation's qualified retirement plan, which then invests in the business. The ROBS structure must comply with IRS and Department of Labor regulations, and the SBA lender will require documentation of its proper establishment.","example":"A buyer needs $150,000 for their equity injection. They establish a ROBS plan, rolling $150,000 from their Roth IRA into a new C-corporation's 401(k) plan. This 401(k) then purchases stock in the operating company, providing the required equity. The lender will scrutinize the ROBS setup for compliance.","what_lenders_check":"Lenders require assurance that the ROBS plan is legally compliant and properly structured to avoid future IRS penalties for the borrower and to ensure the equity is genuinely available and unencumbered. This involves significant due diligence on the ROBS provider and documentation.","required_facts":["Roth IRA","ROBS plan","IRS compliance","C-corporation","Unencumbered funds"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"Can I use retirement funds from a 401(k) as equity injection for a $750,000 business purchase?","url":"https://dealroom.so/sba-7a/questions/can-i-use-retirement-funds-from-a-401-k-as-equity-injection-for-a-750-000-business-purchas"},{"question":"Can funds from a home equity line of credit (HELOC) be used as my equity injection for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-a-home-equity-line-of-credit-heloc-be-used-as-my-equity-injection-for-a-bus"},{"question":"Is it possible to use a second mortgage on my personal residence as an equity injection for a $1.5 million business acquisition?","url":"https://dealroom.so/sba-7a/questions/is-it-possible-to-use-a-second-mortgage-on-my-personal-residence-as-an-equity-injection-fo"},{"question":"How much cash must I personally inject for an SBA 7(a) business acquisition?","url":"https://dealroom.so/sba-7a/questions/how-much-cash-must-i-personally-inject-for-an-sba-7-a-business-acquisition"},{"question":"What are the acceptable sources for my cash equity injection beyond personal savings?","url":"https://dealroom.so/sba-7a/questions/what-are-the-acceptable-sources-for-my-cash-equity-injection-beyond-personal-savings"},{"question":"What is the SBA's minimum required equity injection percentage for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-sba-s-minimum-required-equity-injection-percentage-for-a-business-acquisition"}],"related_terms":[{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"IRA","url":"https://dealroom.so/glossary/ira"},{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-equity-injection"},{"term":"Tangible Equity Injection","url":"https://dealroom.so/glossary/tangible-equity-injection"},{"term":"Hidden Equity Injection","url":"https://dealroom.so/glossary/hidden-equity-injection"},{"term":"Equity injection verification","url":"https://dealroom.so/glossary/equity-injection-verification"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/are-funds-from-a-roth-ira-eligible-for-my-equity-injection-if-rolled-over-via-a-rollover-a","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}