SBA rules · SOP 50 10 8.1

Can I use my 401(k) or a ROBS for an SBA down payment?

Yes, funds from a Rollover as Business Startups (ROBS) 401(k) plan may be used to satisfy the equity contribution requirement, provided the plan complies with all applicable IRS, Treasury, and Department of Labor requirements and satisfies SBA rules.

Quoted from SBA SOP 50 10 8.1Every quote checked word for word

In detail

Disclosure and identification: The lender must identify the specific type of 401(k) plan in both the SBA Loan System and the credit memorandum, specifically stating that the applicant is using a ROBS plan for the equity contribution.
Sponsor guaranty: The lender must obtain a full unconditional guaranty from the sponsor(s) of the 401(k) plan, regardless of the sponsor's individual ownership interest in the applicant.
Required documentation: The lender must obtain an IRS favorable determination letter, C corporation formation documents, 401(k) plan adoption documents, stock purchase documents, and related corporate resolutions with the loan application.
Formation costs prohibited: SBA loan proceeds may not be used to pay for any 401(k) plan formation costs.
EPC/OC restriction: The loan cannot be structured under an Eligible Passive Company and Operating Company (EPC/OC) structure because IRS regulations prohibit the 401(k) from providing a guaranty.

The source

What the SOP says

“If applicable, that the Applicant is using a ROBS plan for the equity contribution or other purpose (if the latter, specify the purpose of the ROBS plan).

SOP 50 10 8.1, Chapter 2: Special Transaction Structures > The SBA Lender must: (lines 746-753)✓ Verified

“Obtain the full unconditional guaranty of the sponsor(s) of the 401(k) plan regardless of the sponsor’s individual ownership interest in the Applicant concern.

SOP 50 10 8.1, Chapter 2: Special Transaction Structures > The SBA Lender must: (lines 746-753)✓ Verified

“SBA loan proceeds may not be used for any 401(k) plan formation costs.

SOP 50 10 8.1, Chapter 2: Special Transaction Structures > For a ROBS plan: (lines 754-762)✓ Verified

“The application cannot be structured as an EPC/OC. (13 CFR § 120.111(a)(6)) Under IRS regulations, the 401(k) cannot guaranty the loan.

SOP 50 10 8.1, Chapter 2: Special Transaction Structures > For a ROBS plan: (lines 754-762)✓ Verified

“A business that is owned in whole or in part by a 401(k) plan (including a Rollovers as Business Startups (ROBS) plan) may be eligible provided the SBA Lender complies with the requirements in this section and the plan complies with all applicable IRS, Treasury, and Department of Labor requirements.

SOP 50 10 8.1, Chapter 2: Special Transaction Structures > 401(k) Plans Including Rollovers as Business Start-ups (ROBS) Plans (lines 739-745)✓ Verified

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