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.

    Details

    Product Name CatchFire Funding ROBS
    Requirements Operating business, C corporation or willing to convert to one, eligible retirement, employee of your business

    Application Criteria

  • 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

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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