You cannot benefit from SBA loans if you don’t have a life insurance policy. SBA is meant to boost small businesses hence increasing the risk of default because most small businesses don’t possess all the required management skills. A baker who starts a baking shop can have good baking skills but lack the required financial skills required for the business to thrive. These reasons push SBA into making life insurance a necessity in order to protect the lender and their families. When you are close to a loan application deadline, you can visit a company like Life Easeto get an expedited insurance cover without exam.
Thorough research should be the first step before applying for an SBA loan. It is very common to find people who realize about some of the requirements when the deadline is very near. Visiting a life insurance provider is the first thing you should do because SBA loans need it as a basic requirement. It will be more beneficial if you start this process early enough because a life insurance will require a duration of 4-6 weeks before going into force. You should use the services of companies that give expedited insurance coverage if the deadline is very close.
The actual application process comes after gathering the required information. You have to give your contact information and other beneficiaries information. The insurance company will conduct a medical exam in which you have to answer some medical questions. When close to deadlines, you can use the services of insurance companies such as Life ease who don’t conduct these exams.
There is also a physical exam that is conducted by a third party exam company. The documents required at this step include; motor vehicle records, driving records , health records and criminal records. This process requires the presentation of all the required information for it to be complete. After all the information have been presented, the underwriter assess the risk to determine whether you application should be approved or declined. If you have been approved, you can sign the agreement and pay your first premium.
Most life insurance policies meant for SBA loans must have the collateral assignment step in order to be effective. The collateral assignment is a simple document that should be provided by the insurance company’s legal department. There should be an agreement between each parties in a life insurance on how to distribute the benefits in case of death. SBA will first receive the amount you owe them in case of death and your beneficiaries will share the remaining amount according to your wish.