For SBA lenders
Short answer
For a ROBS equity injection, the lender must obtain documentation from the ROBS facilitator, verify the establishment of the C-Corp and 401(k) plan, and confirm the rollover of funds from the retirement account into the new C-Corp's business account. The transaction must comply with IRS regulations.
A Rollover for Business Startups (ROBS) allows individuals to use retirement funds for equity injection without incurring taxes or penalties, by rolling them into a new C-Corporation that sponsors a 401(k) plan. Lenders must verify the legitimacy of the ROBS transaction by obtaining all relevant documentation from the ROBS facilitator, including the C-Corp formation, 401(k) plan documents, and evidence of funds being properly transferred from the individual's existing retirement account to the C-Corp's business account. The lender must also ensure the borrower's ownership in the C-Corp is direct and not through the 401(k) plan.
A borrower plans a $200,000 equity injection via a ROBS transaction. The lender requires copies of the newly formed C-Corp's articles of incorporation, the adopted 401(k) plan document, and bank statements showing the $200,000 transferred from the borrower's IRA into the C-Corp's operating account. The lender also obtains a confirmation letter from the ROBS facilitator.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on equity injection verification
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day