My Solo 401k Financial ROBS review
Low-cost assistance rolling over your retirement funds to start a small business.
finder.com’s rating: 4.7 / 5.0
- Best for low-cost help using your 401(k) to fund a small company.
- Pick something else if you expect to have more than 10 employees by next year — it can get expensive.
First, do I qualify?
You must eventually meet the following requirements to qualify for a Rollover for Business Startups (ROBS) — though you don’t need to meet them all when you reach out to My Solo 401k Financial:
- Eligible retirement plan. You must have an IRA or a former employer 401(k), 403(b), Keogh, SEP, SIMPLE or other non-Roth plan eligible for ROBS.
- Operating business. Your business must be active and running when you apply for a ROBS through My Solo 401k.
- Registered as a C corporation. If you aren’t already registered as a C corporation, you’ll have to change your business structure to this one — it’s the only that qualifies for a ROBS.
- Work at your business. You must be registered as an employee of your business to qualify for this funding.
Other requirements and restrictions
- Valuation. Your up-and-running businesses must be valued before you can get a ROBS.
- No commission. You can’t charge commission on the stock you purchase when you roll over your retirement plan.
- Employee rollovers. If your company already has employees, you might be required to allow them to roll over their retirement plan into the business as well.
What makes My Solo 401k unique?
My Solo 401k is one of a handful of companies that specializes in helping entrepreneurs fund a new business with your 401(k). Its pricing is lower than what many other companies out there charge.
How much does a My Solo 401k ROBS cost?
My Solo 401k is on the cheaper side compared to other ROBS providers out there. Here’s how its two fees break down:
Setup fee: $4,000
This one-time setup fee covers all costs associated with setting up your ROBS including:
- Forming a C corporation
- Establishing a 401(k) profit-sharing plan (PSP) to fund the new business
- Setting up an EIN for the 401(k) PSP
- Setting up an EIN for the corporation
- Opening a corporate bank account
- Opening a brokerage account for the 401(k) PSP at Fidelity Investments
- Preparing transfer forms for transferring your retirement funds to the 401(k) PSP
- Assistance responding to any IRS or Department of Labor audits
Annual fee: Starting at $899
My Solo 401k charges $899 for the first 10 employees — also referred to as participants — in a ROBS and $75 for each additional employee. This covers the cost of annual support for your ROBS, including:
- Preparing IRS Tax Form 550 and valuation
- Reporting for Form 1099-R
- Making annual amendments required by the IRS
- Adding employees who become eligible for the 401(k) PSP
- Reviewing annual employee statements
- Computing plan contributions
- Carrying out nondiscrimination testing
- Other annual additions and coverage
- Low cost compared to other ROBS
- Accepts all ROBS-eligible retirement plans
- Legal and compliance support in case of an audit
- Works with SBA lenders and can assist with the application
- Veteran discount program
- Potentially high annual cost for fast-growing companies
- Must establish a C corporation
- Not as fast as some business loans
Compare other business loan options
How do I sign up?
Follow these steps to get started on your ROBS with My Solo 401k:
- Go to the My Solo 401k website.
- Click Get started.
- Scroll down to 401k Business Financing and click Get started again.
- Fill in the required fields with information about yourself, your corporation, retirement fund and other businesses you own.
- Click Send.
A representative from My Solo 401k should reach out to you to discuss how to start a ROBS. Typically, the whole process of rolling over your 401(k) takes between two to three weeks. However, it depends on your retirement account provider.
What information do I need to provide?
You’ll need the following information to complete the application:
- Your contact information
- Corporate board of directors and officer names
- First and second choices for the name of your new corporation
- Corporate address
- Name of the corporate registered agent and address
- Information about your retirement account
- Names and contribution amounts for all investors
- How you want to use the ROBS
- All related businesses owned by you and your spouse
Compare My Solo 401k Financial to other lenders with our guide to business loans.
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Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 950 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
My Solo 401k has some of the lowest fees out there — especially if your business has less than 10 employees. Its upfront cost is nearly $1,000 less than what some other top providers charge, and its annual fee of $899 is close to half what other companies charge.
On top of this, it provides legal and compliance support if your business gets audited. And it’ll even connect you with government-backed funding if you’re interested in an SBA loan. The main drawback is that it charges an extra $75 annually for each new employee, making it expensive if your business grows too quickly.
Not sure it’s right for you? Compare your other business loan options below.