The adage “you have to have money to make money” is an accepted truth. Whether your goal is global expansion or simply the purchase of additional inventory, if cash reserves are not sufficient to drive the project, lending institutions are often your first stop. However, when embarking on the project, borrowers should keep in mind that lenders may require security in more than one form.

Owners are vital to their businesses and the loss of an owner could seriously harm the stability, cash flow and reputation of the company. In order to protect itself, the lending institution often requires collateral insurance to be placed on the owner(s) to ensure the loan will be repaid in the event of death. Since this is a cost of doing business, all or a portion of life insurance premiums paid by the business may be tax deductible.

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