Life Insurance for SBA Loans
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Life Insurance for SBA Loans
If you’re gone, key person life insurance can help offset the costs of recruiting, hiring, and training a successor to your position. This allows your company to transition smoothly and won’t take away from valuable time and profits necessary to keep a business running.
What Are SBA Loans?
Key man life insurance is not a stand-alone policy, and you will need a personal policy to provide financial stability for your family. However, key man life insurance can help protect your family after you’re gone.
Why Do SBA Loans Require Life Insurance?
SBA loans are term loans offered by banks or lending institutions that are guaranteed up to 80% of a loan’s principal, or the substantial amount of the loan. Government loans are often inaccessible to many due to the high financial risk they pose. If too many people don’t pay back their loans, the government could find itself in serious financial trouble. SBA loans are accessible and have figured out a way to reduce lender risk by tying the loan to something most families already need: life insurance.
Life insurance is the simplest form of collateral: in assures that your loan will be paid off with minimal impact to your family. Other forms of collateral could include your stocks, bonds, savings, land, real estate holdings, or any machinery you own. In some cases, families will be forced to take on debts and sell what they can to pay them. An SBA loan insures that your family is protected, as well as the lender’s interest.
What you should know about SBA Loans
If you’re gone, key person life insurance can help offset the costs of recruiting, hiring, and training a successor to your position. This allows your company to transition smoothly and won’t take away from valuable time and profits necessary to keep a business running.
Find the Best Policy for Your SBA Loan
Finding the proper life insurance policy to cover your SBA loan and to protect your family will require the help of a trained and knowledgeable agent, particularly if you aren’t in the best health.
Because our agents specialize in working with life insurance for SBA loans, they can help set up your collateral assignment form, making sure it is up-to-date and that your money is going where it should