{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-requirements-for-using-retirement-funds-structured-as-a-rollover-for","api_url":"https://dealroom.so/api/public/questions/what-are-the-specific-requirements-for-using-retirement-funds-structured-as-a-rollover-for","question":"What are the specific requirements for using retirement funds, structured as a rollover, for a 7(a) loan equity injection?","topic":"Equity injection verification","audience":"lender","bot_mode":"lender","short_answer":"Retirement funds can be used for equity injection if properly rolled over into a new qualified plan that allows for business investment, ensuring the funds are unencumbered and fully available to the business.","rule":"Funds from a qualified retirement account, such as a 401(k) or IRA, may be used for equity injection if they are rolled over into a \"Rollovers for Business Start-ups\" (ROBS) plan, which is a specific type of 401(k) plan that invests in the stock of a C Corporation. The funds must be fully accessible and not create a prohibited transaction or debt.","example":"A borrower plans to use $150,000 from their 401(k). The lender verifies that these funds are rolled into a new ROBS-compliant 401(k) and then invested as equity in the C Corporation borrowing the 7(a) loan.","what_lenders_check":"Lenders must verify the legitimacy of the ROBS plan, ensure compliance with IRS and DOL regulations, and confirm that the funds are genuinely equity in the borrower's business and not a loan. Legal counsel review is often required.","required_facts":["Retirement funds","ROBS plan","C Corporation","Unencumbered"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","7(a) Loan Program Terms, Conditions, and Eligibility"],"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":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"question":"What documentation verifies funds for equity injection transferred from a personal investment account?","url":"https://dealroom.so/for-lenders/questions/what-documentation-verifies-funds-for-equity-injection-transferred-from-a-personal-investm"},{"question":"How does a lender verify equity injection funds that are a cash gift from a non-family third party?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-that-are-a-cash-gift-from-a-non-family-thi"},{"question":"Can a borrower's investment in a certificate of deposit (CD) count towards the required equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-investment-in-a-certificate-of-deposit-cd-count-towards-the-required-equi"},{"question":"What specific documentation is required to verify equity injection funds originating from a borrower's existing business assets, such as equipment or inventory?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-to-verify-equity-injection-funds-originating-from-"},{"question":"How does a lender verify the source of gifted equity injection funds when the donor is a foreign national?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-source-of-gifted-equity-injection-funds-when-the-donor-is-a-f"},{"question":"How does a lender verify equity injection funds that are sourced from a personal line of credit secured by non-personal real estate?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-equity-injection-funds-that-are-sourced-from-a-personal-line-of-c"}],"related_terms":[{"term":"Retirement account funds","url":"https://dealroom.so/glossary/retirement-account-funds"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"term":"Rollover as Business Start-Up","url":"https://dealroom.so/glossary/rollover-as-business-start-up"},{"term":"Rollover as Business Startup Plan","url":"https://dealroom.so/glossary/rollover-as-business-startup-plan"},{"term":"Rollover for Business Startups","url":"https://dealroom.so/glossary/rollover-for-business-startups"},{"term":"SBA 7(a) program","url":"https://dealroom.so/glossary/sba-7-a-program"}],"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/for-lenders/questions/what-are-the-specific-requirements-for-using-retirement-funds-structured-as-a-rollover-for","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."]}