SBA Loans – Required Term Life Insurance
Required Term Life insurance for SBA Loans
SBA loans typically involve a large sum of money, which in turn creates a significant financial risk for the lender. Not only is the lender susceptible to the borrowers defaulting on their SBA loans, there is also the risk that borrowers may die prematurely or become permanently disabled. If an event like this were to occur and the borrower was not insured, the lender would then be in a position to lose a lot of money.
The solution for this is Binding Required Loan Life Insurance. The SBA loan can either be paired with an existing policy through a process called collateral assignment or a new policy can be issued. In either circumstance, the lender would be designated primary beneficiary on the insurance policy so that the SBA loan could be repaid in full if something were to happen to the borrower.
Expediting your SBA Loan with SBA Super Close
The good news for borrowers is that many banks will actually open the term life insurance policy for their SBA borrowers and build that cost right into the SBA loan itself so there is often no separate cost incurred by the borrower. The benefit of SBA Super Close is that the costs of the SBA loan insurance policy can be added to the loan repayment which are, in most cases long term. Furthermore, Term Life Insurance is generally very affordable and since the term for the loan itself can be for a lengthy period of time the monthly cost of the insurance policy will be minimal. For more information about SBA Loans and Binding Required Term Life Insurance, and for more details about SBA Super Close, contact Himmelstein Financial.