SBA 7(a) Q&A
Short answer
Yes, funds from eligible retirement accounts can be used for equity injection through a Rollover as Business Start-Up (ROBS) plan, provided it adheres to IRS and SBA guidelines.
SBA allows equity injection from a ROBS plan if structured properly, typically involving the establishment of a C-corporation that purchases the assets of the new business, with the retirement funds invested in the C-corporation's stock. The plan must comply with ERISA and IRS regulations to avoid prohibited transactions and taxation issues.
A buyer needs $100,000 equity. They roll $100,000 from their 401(k) into a new C-corp, which then purchases the business. The C-corp issues stock to the buyer, representing their equity.
Insider move
Lenders will scrutinize the ROBS plan's compliance with IRS and ERISA rules to ensure the funds are truly unencumbered equity and not a disguised loan. Proper documentation of the plan's setup and funding is critical.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
SBA 7(a) Loans Overview
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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 down payment & equity injection
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