Immediate Financing Arrangement (IFA)
Immediate Financing Arrangements (IFA) are a strong way to build a safe, tax-efficient life insurance asset and leverage it for your business, for yourself, for your family and for your estate & legacy.
IFAs are done by profitable business owners & incorporated professionals who are consistently flowing dividends to their HoldCo.
IFAs work well for clients who experience significant liquidity events and want to secure this windfall for life, for new projects and for generations.
If this is you, we are happy to connect and see if we can be of service. IFA arrangements are not widely known throughout the financial industry and require working with an experienced team. We are that team.
What Is an Immediate Financing Arrangement?
The Immediate Financing Arrangement – IFA is a lending arrangement collateralizing a Participating Whole Life Insurance policy in Canada. It’s a way to leverage the right kinds of insurance policy to secure lending facilities at banks.
Typically this is done by the owner of a profitable, closely-held Operating Company who is flowing Dividends to their Holding Company each year.
In other words, an IFA allows qualified individuals or private corporations in Canada to use the Cash Values of Permanent Life Insurance to secure loans at 3rd party banks.
These loans may be structured as demand loans or as revolving lines depending on the bank you work with. The right leveraged life insurance has high loan-to-value up to 80-100% LTV of the cash values.
How the IFA Works
The IFA arrangement begins with a client or corporation purchasing life insurance on the owner or key shareholders or employees and pledging the policy to a private bank. The bank then gives the client a loan based on these assets and the client can reinvest this money as he or she wishes. Usually this money is invested to accelerate wealth growth in a tax-efficient manner.
After age 55 this arrangement may be used to supplement retirement income (called IRP Insured Retirement Plan.)
Why the Immediate Financing Arrangement?
- allows growth of Retained Earnings inside the Holding Company in a safe, tax-efficient manner.
- provides liquidity through various lending facilities secured against the life insurance asset.
- provides a retirement income strategy.
- provides tax-efficient estate value to your heirs and legacy.
Who Can Benefit From an Immediate Financing Arrangement?
IFAs are not for everyone, but they can significantly benefit certain individuals and business owners.
- Incorporated business owner or professional with a family or will have a family.
- Need permanent life insurance while also desiring to reinvest in their companies and build wealth.
- Healthy and able to qualify for life insurance in Canada.
- Have or building high net worth.
- Some business owners seeking IFAs use the funds to invest in the market, in real estate, in their own company, buying other businesses, produce additional retirement income and leave tax-efficient legacies to their heirs.
- IFA works great for an incorporated business owner with high margins, good credit and good cashflow.
How Safe Pacific Can Help With an Immediate Financing Arrangement
Safe Pacific Financial is knowledgeable and experienced in placing various leverage life insurance solutions like an Immediate Financing Arrangement. We have the expertise and the connections to ensure your plan is set up right and serviced properly over time. The IFA plan is customised to your life situation and your goals. Setting up these arrangements is very specialized and choosing the right advisor team to work with is a crucial step in your lifetime success.
- We are 100% independent – no bank or insurance company owns us or pressures us what to do.
- We work with all of the major insurance companies and banks and ensure they compete for your business.
- This strategy is a long-term financial strategy – ideally for the rest of your life. We take a long term relationship view of working with clients.
We are happy to open the conversation and see if an Immediate Financing Arrangement could be a right fit for you. Schedule a consultation with one of our professional advisors to learn more about the IFA (Immediate Financing Arrangement).
Our Process
Our multiple meetings process lets us get to know your unique business, and your goals. Our no pressure, no rush philosophy means that we won’t rush you to make any decisions. We are driven by satisfied clients that choose what’s best for their business; not by sales targets or commissions.
Step 1
Discovery Meeting
We’ll get together in-person and learn about your current situation, your goals and your concerns moving forward. This is an important first meeting as it sets the stage for our ongoing relationship. Our first discovery meeting takes place in a trusted and comfortable environment —usually our office or your office.
Step 2
Crunch The Numbers And Make A Plan
From there, we’ll head back to the office and crunch numbers and come up with some suitable recommendations based on what you told us at the discovery meeting. We’ll run quotes with various insurance and investment suppliers and put together a written plan with options and pricing to present you.
Step 3
Proposal Meeting
We will meet with you again and present a written proposal with Considerations, Recommendations, Options and Pricing. Everything in the plan will be explained to you in plain English and we will show some options to fit your needs and budget. During this process our core philosophy of “no pressure, no rush” helps build trust and make you feel comfortable as we move forward.
Step 4
Implement Your Plan
This happens about a week later—after we’ve made any proposal changes and updates based on your feedback. Once we’ve agreed on a great solution we can start to implement the plan. By the time we get to this stage we’ve gotten to know each other very well and have built a good relationship.
We hope we can welcome you to the Safe Pacific family, where we can work together to meet your family's goals for many years to come.