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The information provided by these calculators is for illustrative purposes only and accuracy is not guaranteed. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a BLP financial professional prior to relying on the results.

This calculator does not have the ability to pre-qualify you for any loan program. Qualification for loan programs may require additional information such as credit scores and cash reserves which is not gathered in this calculator. Information such as interest rates and pricing are subject to change at any time and without notice. This calculator does not calculate the Annual Percentage Rate or Average Prime Offer Rates. BLP does not guarantee any of the information obtained by this calculator.

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SBA 504 LIFE INSURANCE REQUIREMENTS

SBA requires a determination of whether the viability of the business is tied to an individual or individuals and whether a written succession plan exists. SBA requires life insurance for the principals of sole proprietorships, single member LLCs or for businesses otherwise dependent on one owner’s active participation, consistent with the size and term of the loan.

REQUIRED INSURANCE

  • Consistent with size and term of the SBA loan.
  • Borrower may pledge an existing policy. If a new policy, a decreasing term policy is most appropriate. Credit life insurance or whole life insurance would not be required.
  • Each policy must have a collateral assignment for SBA.
  • Evidence of the policy remaining active must be provided throughout the life of the loan.

COLLATERAL ASSIGNMENT REQUIREMENTS

  • Typically on SBA form. Alternative forms must be approved by Business Lending Partners legal counsel.
  • Must list Business Lending Partners/U.S. Small Business Administration as assignee.
  • Must be acknowledged by the Home Office of the insurer.
  • Documentation of sufficient coverage amount and other lien holders is required

UNINSURABLE

  • If the principal is uninsurable, written documentation from a licensed insurer must be provided.
* Requirements are subject to changes by SBA. For most recent guidelines, please contact BLP.

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Karmin Garstecki
Karmin Garstecki
Loan Officer
Karmin Garstecki is one of Business Lending Partners Loan Officers. Karmin conducts credit analysis and application processing for BLP. Karmin also assists in maintaining the Business loan portfolio. Karmin holds a BBA in Finance from the University of Wisconsin - Whitewater.
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