SBA 7(a) Q&A
Short answer
Yes, retirement funds can potentially be used for equity injection through a Rollover for Business Start-ups (ROBS) plan, but it's a complex process.
The SBA permits the use of retirement funds as equity injection provided the transaction is structured as a ROBS plan, compliant with IRS and Department of Labor regulations. This involves rolling over funds into a new C-corporation, which then invests in the small business. The business must be an operating company, not a passive investment.
A buyer acquiring a $750,000 business needs $75,000 in equity. They have $100,000 in a 401(k) and use $75,000 through a compliant ROBS structure to fund their equity injection.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. 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.
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