IFA Lending
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Catalyst Private Credit > IFA Lending
An Immediate Financing Arrangement, or IFA, combines permanent life insurance with a separate borrowing arrangement. A policy with cash surrender value is assigned as collateral, and other security may be required. Under a common bank structure, the client pays the premium from their own resources and then accesses borrowing under the lender's approved terms.
What the review includes. Catalyst's IFA lending focus considers the financing alongside the policy and the intended use of the borrowed funds. A review includes the policy illustration, actual available values, ownership, annual premium commitments, additional collateral, and the borrower's capacity to service the debt.
Ongoing borrowing risk. Interest rates, policy performance, collateral requirements, and renewal or repayment terms can affect the outcome. Projected policy values are not the same as guaranteed values. The arrangement should be reviewed with the borrower's insurance, tax, and legal advisors. For IFA transactions, timing is confirmed following the initial review.
- Policy illustration and actual available values
- Policy ownership
- Annual premium commitments
- Additional collateral offered
- Capacity to service the debt
- Intended use of the borrowed funds
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.
