Creative Financing: Using Cash Value Life Insurance as a Business Loan Source

As a business owner, securing financing is crucial for growth and success. Traditional loans may not always be the best option, especially if you have been turned down in the past or if you are looking for more creative ways to finance your business. One option you may not have considered is using the cash value of your life insurance policy as a loan source.

How it Works

Cash value life insurance policies offer a unique way to borrow money without having to go through a credit check or provide collateral. The cash value of your policy can be used as collateral for a loan from the insurance company. You can then use the loan proceeds for any business purpose, such as purchasing equipment, expanding your business, or paying for operating expenses.


Using your life insurance policy as a loan source has several benefits:

  • No credit check required
  • No need to provide collateral
  • No repayment schedule – you can repay the loan at your own pace
  • The cash value of your policy continues to grow, even while you have a loan outstanding

Things to Consider

While using your life insurance policy as a loan source can be an attractive option, there are a few things you should consider:

  • The loan interest rate may be higher than traditional loans
  • If the loan is not repaid, it will reduce the death benefit of your policy
  • If the loan exceeds the cash value of your policy, you may have to pay taxes on the excess amount

Connecting with Our Team

If you are interested in learning more about using cash value life insurance as a business loan source, our team can help. We specialize in bank-owned life insurance and have experience working with businesses of all sizes. Contact us today to schedule a consultation and see if this financing option is right for you.

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