SBA loan basics
Short answer
Yes, funds from retirement accounts (IRA, 401(k)) can be used for an equity injection, but it typically requires a complex, specific rollover process.
This process, often called a 'Rollover for Business Start-up' (ROBS), involves rolling over retirement funds into a new C-corporation, which then uses the funds as equity. It must be structured carefully to avoid taxes and penalties, and it does not involve the SBA directly but is an accepted source of equity.
A borrower rolls over $150,000 from their 401(k) into a new C-corporation that is acquiring a business. This $150,000 can then count as the borrower's equity injection for the SBA loan.
Insider move
Lenders require evidence of a properly structured and executed ROBS transaction. They rely on third-party administrators specializing in ROBS to ensure compliance with IRS rules, as improper execution can lead to severe tax penalties.
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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