Benetrends Financial provides a variety of business loans, but they are best known for pioneering the rollover as business startups (ROBS) product—which they started before the IRS came up with the official name for the ROBS process. Benetrends’ ROBS plan, called the “Rainmaker Plan,” allows business owners to legally access their retirement savings to invest in their business with no early withdrawal fees.
ROBS is not like a traditional loan product; instead, you are able to invest money from your retirement fund—like your 401(k) or IRA—to finance a business. While you won’t have to worry about debt or interest payments, you also risk losing your retirement savings if your business does not succeed.
Besides their ROBS product, Benetrends also offers several other types of funding solutions, from SBA loans and securities-backed lines of credit to startup funding and equipment leasing. However, for the purpose of our review, we’ll focus on their Rainmaker Plan ROBS product.
Pros and Cons
- No debt or interest
- No credit check
- No withdrawal penalties
- Trusted authority for ROBS
- Upfront and sustained costs
- Jeopardizing your retirement savings
- Must create a C-corp
- Chance of IRS audit
Benetrends ROBS Product Details
Initial Setup Cost
What You Need to Apply
In order to qualify for Benetrends’ Rainmaker Plan, or any ROBS product, you must first have an eligible retirement account, such as a 401(k), traditional IRA, SEP, 403(b), Keogh, or TSP account. This retirement account must have a balance of at least $50,000.
Your business must also be a C-corp. If your business is not currently structured as such, you will need to form a C-corp before you can proceed with ROBS.
How to Get a Loan With Benetrends Financial
If you meet the above eligibility requirements, here’s how the application and funding process works with Benetrends Financial.
Application and Underwriting Process
The process of setting up a ROBS is pretty paperwork and bureaucracy intensive, but because Benetrends Financial came up with the process, they’ve got it down to a science and will make it extremely easy for you.
First, to set up a Benetrends ROBS, you will pay a $4,995 setup fee, which includes the following services:
- Incorporation services
- Articles of incorporation
- Company bylaws, minutes, and stock certificates
- Plan/adoption agreement setup
- Initial stock valuation for newly created C-corp
- Unlimited consultations with your retirement plan analyst
Keep in mind that while you aren’t paying interest on this type of startup funding, the hefty setup fee could work out to more than the interest rate on some other types of loan products, so you should always do your research and compare costs before choosing a loan.
To start, Benetrends will make sure that your business entity is a C-corporation. Unfortunately, this will mean more regulation in your startup’s future, but being a C-corp is absolutely essential to performing a legal ROBS.
Next, Benetrends Financial will help you to write up a new financial plan for both retirement and your new C-corporation. This will entail setting up new corporate and retirement bank accounts.
After setting this all up, Benetrends will help you initiate the rollover process from your initial retirement plan into the customized plan that you and Benetrends just set up.
Finally, you will invest your newly formed plan into your newly formed corporation by purchasing stock in your corporation.
After you fund with a Benetrends ROBS, you will pay a monthly maintenance fee of $145. This fee includes:
- Yearly preparation of Form 5500, annual report summary
- Dedicated retirement plan analyst
- Annual compliance testing and contribution limit
- Calculation of retirement contributions
- Determine employee eligibility and vesting
- Distribution processing, 1099 R Form
- Preparation/participant loan processing
- Review and reconcile account statements
- Annual fair market value oversight support
- Required plan amendments and restatements
- Plan design and contribution consulting
- Tax savings strategies as related to the retirement plan
- Provide required employee notifications
If you have over 25 participants in your C-corp’s retirement plan, you will also have to pay an additional $20 per participant.
Because of the structure of this type of business funding, post-funding support is absolutely crucial—and Benetrends certainly provides it.
Benetrends Financial has an in-house team of financial experts that can help you navigate your retirement plans and corporate accounts after the rollover process. They provide custom plans based on each business’s needs, and these can include 401(k) and profit-sharing options.
Plus, they have an extremely low audit rate—and, since they began offering this plan in 1983, have never had a Benetrends ROBS plan disqualified by an IRS audit.
Benetrends Financial Customer Service
Benetrends Financial is located in North Wales, Pennsylvania, and can be reached by phone, fax, or email. If you’re a customer of their ROBS product, you will also be assigned a retirement plan analyst, with whom you can have unlimited consultations.
Benetrends Financial Customer Reviews
Customers have a mix of feedback when it comes to Benetrends Financial reviews. On the positive side, many customers highlight the great customer service they received, from helpful account managers who took the time to answer all their questions to responsive, professional communication. For those who successfully funded with Benetrends, they call out the simplicity of the process and are overall pleased with the results.
On the other hand, many Benetrends complaints from customers center on the cost of their services—not everyone is necessarily convinced that Benetrends ROBS are worth their initial and sustained costs. Again, be sure to compare this total cost to the interest rates on another loan product to see which one truly winds up costing less.
Additionally, a few customers have submitted Benetrends complaints stating that they weren’t made aware of the monthly payments that Benetrends would charge them. Though it’s certainly on the institution to make sure that all charges and fees are upfront, be sure to read through all of the fine print on any agreement you sign, whether with Benetrends Financial or otherwise.
Frequently Asked Questions
Is Benetrends Financial in Fundera's Network?
Benetrends Financial is not in Fundera’s Lender Network. The Fundera team carefully vets all of the lenders in our network, and have determined that Benetrends Financial either doesn’t have the technology to work with Fundera or does not offer a financing product that competes with the other lenders in its product class. We suggest considering another lender in this product class.
Christine Aebischer is an editor at Fundera.
Prior to Fundera, Christine was an editor at the financial planning startup LearnVest and its parent company, Northwestern Mutual. There she wrote and edited on topics such as debt, budgeting, insurance, taxes, investing, and retirement. She has written for print and online on topics ranging from personal finance to luxury real estate.