SBA loan life insurance is not my bailiwick. I help people create and fund corporations using their own retirement funds, a process the IRS refers to as ROBS. Some of my clients need SBA loans. There is an additional step an SBA applicant needs to complete if using retirement funds. My part in the process, so far, has not dovetailed with life insurance issues. This article intends to give a broader perspective to the SBA process than I typically discuss, specifically how SBA loan life insurance fits into the process.
Fund Your Business
SBA’s “Fund Your Business” page is located here. The ROBS funding process is a self-funding option. “Self-funding can come in the form of turning to family and friends for capital, using your savings accounts, or even tapping into your 401k.” There are two ways to tap into your 401K plan; as a taxable distribution or through a plan investment into your new corporation. Most people prefer the later option. That’s where I can help.
The SBA will not create your plan investment framework for you. I handle that piece. This segment typically does not add any significant time to the SBA process.
SBA Loan Life Insurance
The SBA wants you to obtain life insurance that will pay off your loan in case something happens to you. Some people put off the life insurance application until later in the process, not realizing that the insurance process can take several weeks. I highly recommend that you connect with your insurance person to get started on this as early in the process as possible. If you do not have an insurance person, check out this website.
Online SBA Lenders
Some of the SBA loan ads online are from companies who make money referring people to lenders (or insurance companies, or ROBS promoters). Nothing wrong with such companies. I recommend that before you contact such a company, or any lender, start with the SBA itself. If you are new to the SBA process, start here. The process can be daunting. We are here to help in any way we can.
When to Call Frank Selden Law
This one is easy – as soon as you consider using your retirement funds to help fund your business. You can book your own 30 min no cost or obligation phone consult here.