I know I am balancing on the small tip of the iceberg with the number of CEO’s and business partners that I have helped with last minutes rescues for business loan collateral life insurance when they find out, at the last minute, that the life insurance they thought they were going to get has been declined. Many, like an HIV+ CEO I helped just let the clock tick down knowing that they would be declined for life insurance. Any of us who have been clambering our way toward the closing of a business loan know just how fragile that process can be, with a new requirement every day and an interest rate that is hanging by a thread. We hope that we can have it all well before closing so that we can relax and just show up to sign, so a last minute decline of life insurance, collateral being a rather significant requirement, can be a deal breaker or at least cause for extreme stress.
What do you do? The last life insurance application may have taken a few months and there is no pushing the process with traditional companies. Putting the closing off for another long life insurance application period is likely to be costly and has the potential to be a deal breaker if the loan was for some kind of acquisition, or if the interest rate will change if the closing doesn’t occur as scheduled. Getting bad news a week or two before closing is, well, feels like getting bad news too late in a game to change course. The good news is that, if life insurance is the sticking point I can plug that hole in the dike, get you closed on time with the collateral requirement fulfilled, and buy us the time to get the traditional life insurance program figured out and back on track.
No matter what happened on your original life insurance application, unless you’re in prison, we can get a policy approved and in force within 4-5 business days and a collateral assignment form for the bank within that same time frame. Issued by Lloyds of London, these aren’t traditional life insurance policies, but they are accepted by the SBA and I have never had a bank show any reluctance to accept it. They’re affordable, not $19 a month affordable, but in the context of keeping the closing on track, extremely cost effective. And back to “buying us time”. With very few exceptions a decline by one life insurance company doesn’t mean that you will be declined by all life insurance companies. So, we can use Lloyds on a monthly basis until we figure out another traditional company that will pick up your long term life insurance need and run with it.
Bottom line. Don’t let a business financing deal go south because of life insurance issues. Don’t let the back against a wall feeling stop you in your tracks. If you have questions about saving a business deal with last minute life insurance, or getting business life insurance if you are HIV+, both traditional or through Lloyds, call or email me directly. My name is Ed Hinerman. Let’s talk.