Life Insurance Requirement for SBA Loans
Under SOP 50 10 5 (B), the “lender must determine if the viability of the business is tied to an individual or individuals. In these situations, the lender must require life insurance”.
A life insurance policy is required to secure an SBA loan. The lender will either be named on the collateral assignment form (most common request) or as the beneficiary with special wording.
We work with SBA Borrowers and Lenders to provide life insurance for SBA Loans.
- We can provide a policy within 24 hours with the required collateral assignment form.
- After the collateral assignment is signed and notarized by you, we rush the “recording process” where the life insurer has to sign off on it. This process can take up to 3 weeks and we’re able to get this through within 5-7 business days in most cases.
- We work with SBA lenders across the nation and have the experience and knowledge to get this done quickly
- You’ll be working with an SBA life insurance expert the whole time. You’ll have a direct line with any questions or updates.
If You’ve Been Declined For Life Insurance
When life insurance agents and consumers can’t secure life insurance coverage for SBA loans due to health and lifestyle issues, they come to us. Don’t let a decline get in your way of receiving your coverage.
If we can’t secure coverage through traditional life insurance carriers, we have access to a special program SOLELY for those who have been declined for coverage and need the coverage for an SBA loan. All it requires is a 1 page application, a copy of the bank loan document and the premium payment. Sample cases we’ve placed where other companies have declined or postponed:
1. $1,000,000 on a 42 year old male with high liver enzymes. Traditional carriers postponed coverage. We had a policy in force within 48 hours.
2. $325,000 on a 35 year old female who entered a drug rehab program 2 years ago.
3. $2,500,000 on a 60 year old male who had his Prostate removed last year due to Prostate Cancer.
Need Coverage Fast (and can’t qualify for a non-med policy)? Consider Short Term Life Insurance Coverage
If you can’t wait 30-90 days to get a life insurance policy in force, we have a program that will issue coverage while you wait for your coverage to be approved. This company can issue coverage for 30, 60 or 90 days with a collateral assignment. This will allow your loan to fund while your application is still in underwriting. (However, we’d need to speak with your lender directly to confirm this is ok and it usually is)
We’re the experts when it comes to securing life insurance for SBA loans. We have the experience and have seen every scenario possible.
We would appreciate the opportunity to earn your business.