Life Insurance Financing

According to data from the Federal Reserve Board, life insurance companies currently hold about 10% of all commercial loans.  More than 50% of these holdings are held by 10 insurance groups.  Some insurance carriers can be approached directly for financing, but a large percentage of them use correspondents that you must use. These correspondents frequently have ‘par’ pricing with the insurance carrier.  Life insurance carriers tend to do the better loans and they tend to be larger loans.  A lot of life insurance companies will use correspondents because it is not economically feasible for a small to medium sized life insurance company to do all the due diligence required for commercial loans.  Life insurance financing for self-storage facilities can be very attractive due to low rates and larger loans available.

The following terms are general guidelines for life insurance carrier pricing.

Loan Amounts:                $1,000,000 – $50,000,000

Loan Terms:                    5,7, 10, 15 years

Amortization:                   30 Years maximum

Loan To Value:                 75% Maximum

Assumable:                      Generally with a 1% fee

Non-Recourse:                Generally non-recourse

Prepayment:                     Flexible

Cash Out:                        Generally no

Rate Lock:                       Usually rate lock at application

Rates:                              Generally based on U.S. Treasuries. Rates 3.5% – 5.0%

Keep in mind, these are GENERAL guidelines.  Rate and terms can be more or less competitive based on desirability of the transaction and / or the borrower.

To pre-qualify for financing, download the following forms and provide the following information:

  1. Loan Application  (pdf)  (Word) or Apply Online
  2. Personal Financial Statement  (pdf)  (Word)
  3. Resume  (pdf)  (Word)
  4. 2013 Year End Business Financials
  5. 2014 Year-To-Date Business Financials

This is a general guideline for documents normally needed depending on the type of financing being applied for.