After hearing that small businesses applying for SBA loans were experiencing delays getting required life insurance approvals, officials at Springfield, Mass.-based Mass Mutual Financial Group saw an opportunity, said Scott Burrell, managing associate of a new Mass Mutual office in Wilmington.

“SBA 7(a) loans have to be 100 percent backed by life insurance, which must be assigned to the [lender] bank. The [insurance] letter must be in hand in order for the loan to be approved,” he added.

“It takes a long time to get a policy in place, and this delays closing of the loan. We established our own underwriting department strictly for SBA loans, which allows us to get underwriting done, the policy approved and the letter in hand in eight to 10 business days.”

The new program, called QuickClose, is proving popular with borrowers and lenders alike, Burrell said.

Penny Polites, also a managing associate with the firm, said the Wilmington office has done quite a few QuickClose policies for Live Oak Bank SBA
borrowers, notably for independent pharmacists.

The Mass Mutual website states that the business owner – or the business itself – owns the life insurance policy and makes the premium payments. While the 7(a) loan is in effect, the lender retains “collateral assignment” of the policy.

After the loan is repaid, life insurance proceeds go to a beneficiary selected by the business owner.

Burrell was recruited in January 2013 by Dan Shanihan, who is developing new Mass Mutual offices in eastern North Carolina from his base in Raleigh. Burrell, formerly a New York Life agent in Wilmington, said he started with Mass Mutual in late June.

“My goal was to bring in two agents within the year. We have net six agents so far and plan to bring on three more in the next couple of weeks,” Burrell said.