Glossary · The loan itself
In short
A type of permanent life insurance policy that offers flexible premiums and a savings component. While permanent, the SBA typically prefers term life for its collateral requirement due to simplicity.
While Universal Life Insurance can technically fulfill the SBA's life insurance requirement, lenders often prefer term life policies. The cash value component of universal policies can complicate the assignment process. Discuss with your lender which type they prefer to avoid delays.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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