Get the request in writing
Do not assume every SBA loan has the same requirement. Ask the lender to confirm the exact request.
- Name the borrower and insured person.
- Record the required amount and deadline.
- Copy the collateral-assignment wording.
- Save the lender contact and required forms.
Separate coverage from assignment
The policy provides a death benefit under its terms. A collateral assignment gives the lender rights to proceeds for the debt.
Sources: Guardian: Key-person insurance and collateral assignment
Follow the assignment from request to acknowledgment
The lender states its requirement. The applicant completes underwriting. The policy owner signs the assignment, and the insurer records or acknowledges it.
- Confirm the lender request.
- Complete the insurance application and underwriting.
- Use the assignment form the lender and insurer accept.
- Keep the insurer acknowledgment with the loan file.
Plan for underwriting time
Age, health information, product, amount and carrier process can affect timing. This website does not estimate approval.
Confirm the current program rule
Ask which SBA operating-procedure version applies to the loan. Keep the lender instructions with that reference and the policy documents.