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CatchFire Funding ROBS review

Self-directed 401(k) financing with discounts for veterans and a risk-free guarantee.

  • Best for business owners who want the security of two guarantees.
  • Pick something else if the setup and annual fees are too expensive for your business.
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Details

RequirementsOperating business, C corporation or willing to convert to one, eligible retirement, employee of your business

How much will this loan cost me?

CatchFire Funding charges a one-time fee to help set up your new 401(k) plan and rollover the funds, and an ongoing monthly or yearly fee to maintain the new plan. 

The setup fee of $4,995 will cover assistance with:

  • Forming a C corporation
  • Establishing a new 401(k) plan
  • Rolling funds over to the new 401(k) plan
  • Opening a new corporate bank account
  • Establishing a 401(k) bank account and brokerage accounts

The annual fee of $1,164 is a savings of $264 over the monthly payment plan of $199 a month. These ongoing fees cover: 

  • Preparing IRS forms related to the ROBS
  • Determining employee eligibility and assisting with enrollment
  • Assisting plan participants — up to five covered, then $50 per additional employee
  • Ongoing ROBS plan consultation
  • Cyclical plan restatements
  • Forming an exit strategy
  • Assisting with any IRS responses that relate to the initial rollover
  • Managing monthly reconciliations of plan contributions
  • Loan preparation for 401(k) funding
  • Plan audit guarantee

CatchFire Funding offers a 10% discount off the setup fee to eligible veterans. It also donates a portion of the fee to the Wounded Warrior Project.

How it works

With a ROBS plan, you rollover your current 401(k) or other qualifying retirement plan to finance a new business or add capital to your existing business. Because it's self-directed, you have complete control over the investments. 

The process is approved by the IRS and allows you to use your retirement savings without incurring penalties. And if you need additional funding, you may be able to use your 401(k) plan as a down payment for an SBA loan with CatchFire Funding.

What do I need to qualify?

To qualify for 401(k) business financing through Catchfire Funding, you’ll need to meet a few eligibility criteria:

  • Eligible retirement plan. Eligible plans include 401(k), 403(b), SEPs, SIMPLE and several other non-Roth plans.
  • Operating a business. You must have an active business when you apply for a self-directed 401(k) through CatchFire Funding.
  • Registered as a C corporation. If you aren’t already registered as a C corporation, CatchFire Funding will guide you through the process. 
  • Work at your business. You must be registered as an employee of your business. 

What information do I need to apply?

To apply online, you need to provide your:

  • Business information, including name, address, industry and state of corporation
  • Names of the directors, president, secretary and plan trustees
  • Contact information, including at least one phone number and email address
  • All sources of funds, including any funding sources outside your qualifying retirement account
  • Credit card information if you aren’t paying by check

What industries does CatchFire Funding work with?

CatchFire Funding states that it works with almost all types of businesses. However, you may have trouble qualifying if a significant portion of your business involves lending or investing capital.

Pros

  • 401(k) funding process and IRS and Department of Labor (DOL) plan audit guarantees  
  • Veterans get a 10% discount off the setup fee 
  • Online application and payment option
  • Assists with SBA loan applications

Cons

  • Funding takes three to four weeks
  • Unresponsive customer service
  • Rates may change after the first two years

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Is CatchFire Funding legit?

Yes, CatchFire Funding is a legit lender that established in 2009 and has helped fund franchises for well-known brands such as 7-Eleven, Allstate and Menchie’s. It has a secure online application that uses DocuSign to both protect your information and allow you to complete the entire process on its website.

CatchFire Funding reviews and complaints

BBB accredited Yes
BBB rating A+
Customer reviews verified as of 12 October 2020

For a company who has been in business for over 10 years, there are very few direct customer reviews available online. It only has two reviews on the Better Business Bureau (BBB) website. And Trustpilot doesn’t have a listing for the lender at all.

We tried calling customer service a number of times with no return calls. You may want to try the email form on its website if you’re not able to get ahold of customer service by phone.

How do I apply?

CatchFire Funding has a fairly in-depth online application. To begin the process, follow these steps:

  1. Go to the CatchFire Funding website and click Get started.
  2. Select I am ready to get started or I have additional questions.
  3. Enter your full name and email and select Begin signing.
  4. Agree to use electronic signatures and records, then click Continue.
  5. Fill out your corporate information, the names of plan principals, contact information and information on your fund sources.
  6. Choose By check or By credit card for your payment option.
  7. Initial each page where marked and sign it.
  8. Agree to or decline the plan management and administration support, and select monthly or annual payments.

Sign the plan administration section and click Finish.

What happens after I apply?

If you fill out the application and submit it online, you’ll be contacted by a CatchFire Funding agent to go over your application and arrange for payment of your setup and plan administration fees. If you’d rather talk to someone before filling out the application, you’ll be asked to choose a date and time to be contacted. 

According to the website, it takes about three to four weeks to complete your self-directed 401(k) rollover and get financing for your business.

How do repayments work with CatchFire Funding?

A ROBS plan or self-directed 401(k) financing isn’t a loan, so there aren’t any repayments. Instead, you’re using funds from your retirement account to finance your business.
Compare CatchFire Funding to other finance options with our guide to business loans.

Frequently asked questions

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Review by


Kathryn Pomroy was a writer for Finder, specializing in loans. She has written for dozens of major publications, small businesses and many well-known personal finance companies, including LendingTree, Money Crashers, Quickbooks/Intuit, BankRate, LendEDU and more. Kathryn holds a BA in Journalism and drinks super bold coffee while eating peanut butter and honey toast.

Expert review

If you have at least $50,000 in a qualifying retirement account, you may be eligible for a self-directed 401(k) plan with CatchFire Funding. As a Rollover For Business Startup (ROBS) plan, it can be a helpful debt-free alternative to a business loan. It also comes with a few features that you won’t find with every ROBS provider — including a discount for veterans, a funding guarantee and a protection guarantee if you’re audited by the government.

But, much like similar services, it charges a one-time setup fee of $4,995 and either an annual fee of $1,164, or payments of $119 per month, which can add to your cost of doing business. Still, these costs are comparable to several of its competitors.

Not sure self-directed 401(k) financing from CatchFire Funding is for you? Check out these business loans from other reputable providers.

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