SBA loan basics
Short answer
Yes, you can use funds from a retirement account like a 401(k) or IRA for your SBA 7(a) loan down payment, but it requires a specific, often complex, rollover process.
This process, often called a Rollover for Business Startups (ROBS), involves rolling over retirement funds into a new C-corporation established for the business, which then purchases stock in the operating company. This is a complex legal and tax-sensitive transaction that must be structured carefully to avoid penalties.
A borrower needs $150,000 for an equity injection. They work with a specialized firm to roll over $150,000 from their 401(k) into a new C-corp, which then invests the capital into their new operating business.
Insider move
Lenders ensure the ROBS transaction is properly structured and fully completed before loan closing. They often require confirmation from a qualified ROBS provider that the funds are genuinely available as equity and that the transaction is compliant.
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.
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