SBA 7(a) Q&A
Short answer
The business itself typically pays the premiums for life insurance policies it owns, such as key-person policies or those funding entity-purchase buy-sell agreements.
When the business is the owner and beneficiary of the policy, it logically assumes responsibility for paying the premiums. These payments are generally made from the company's operating budget. For cross-purchase buy-sell agreements, individual partners would pay premiums on policies they own for other partners.
For a key-person policy on its founder, Acme Corp. pays the $300 monthly premium directly from its corporate bank account.
Last reviewed 2026-06-15 · SBA sources checked through 2026-06-15. DealRoom analysis of business life-insurance and SBA collateral-insurance practice (SOP 50 10 8). Not insurance, legal, or tax advice. Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on business life insurance & protection
Terms in this answer
← Browse all sba 7(a) questions
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day