Premium Bridge Financing for IFA Transactions
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Catalyst Private Credit > Premium Bridge Financing for IFA Transactions
A temporary bridge may be considered when there is a timing gap around a premium payment and a proposed longer term IFA advance. Whether it can be used depends on the specific insurer and receiving lender. Some IFA facilities require premiums to be paid from the client's own resources.
Before any bridge is advanced. The intended payment route, use of bridge funds, assignment priority, and repayment from the next lender must be acceptable to the parties involved. A proposed bank advance should not be treated as certain simply because a policy has been issued or a premium has been paid.
Prepare for the conversation. Have the premium amount and due date, policy type, ownership details, available illustration or statement, proposed security, and repayment source ready. Share sensitive policy or financial records only through the submission method provided for your review. Timing is confirmed following the initial review.
- Premium amount and due date
- Status of the receiving IFA lender's facility and remaining conditions
- Insurer acceptance of the payment route
- Assignment priority and security coordination
- Intended repayment from the subsequent IFA advance
- Alternative repayment plan if the advance is delayed or unavailable
No. The use of borrowed funds and other tax requirements matter. Borrowing directly to acquire life insurance generally does not qualify for an interest deduction under the usual rule. A limited deduction for qualifying collateral insurance premiums has separate conditions. Obtain advice on the specific arrangement.
Yes. You can include your mortgage broker, insurance advisor, accountant, or lawyer in the discussion. Share their contact details with permission and explain their role in the transaction.
No. An inquiry begins the discussion. Funding requires approval, completed documentation, acceptable security where required, and satisfaction of the applicable conditions. Timing varies with the transaction and the parties involved.
Have a transaction in mind? Share a brief overview and the date you need funding.
Discuss Your FinancingHave a transaction in mind? Share a brief overview and the date you need funding, and we can begin by identifying the information needed for a review.
