Immediate Financing Arrangement
Keep your capital working, without giving up access to it
An Immediate Financing Arrangement lets your corporation fund a permanent insurance policy and, separately, borrow against its growing cash value — so capital keeps compounding while liquidity stays available.
How It Works
From premium to available capital
An IFA has four moving parts. Each is confirmed and structured by your advisor and a lending institution before anything is put in place.
Step 1
Corporation Contributes
Your corporation directs a portion of retained earnings into a permanent life insurance policy it owns.
Step 2
Cash Value Accumulates
Premiums build tax-advantaged cash value inside the policy over time, alongside the death benefit.
Step 3
Policy Is Collateralized
A lending institution accepts the policy's cash value as collateral for a business loan — the policy itself is never surrendered.
Step 4
Capital Becomes Available
Loan proceeds can be used for business investment, expansion, or other corporate purposes, while the policy continues to grow.
Why Owners Consider It
Capital Efficiency
Retained earnings continue funding a permanent insurance policy while the corporation retains access to capital through the loan.
Liquidity Without Surrender
The policy is used as collateral, not cashed in — its cash value and death benefit continue to grow while the loan is outstanding.
Structured Through a Lender
The loan is provided by a lending institution against the policy's cash value, under terms confirmed with your advisor and the lender.
Seen In Practice
What an IFA can look like in practice
Illustrative Scenario — Family-Owned Real Estate Holding Company, British Columbia
A holding company with $2.8M in accumulated retained earnings implemented an IFA structure, directing a portion of retained earnings into a permanent policy while securing a collateralized loan for continued property investment. The corporation maintained access to capital for new opportunities without liquidating existing holdings.
$2.8M
Retained earnings deployed
~90%
Loan-to-cash-value ratio
15+ yrs
Planning horizon
Hypothetical scenario for illustrative purposes only. Loan-to-value terms are set by the lending institution and vary by policy and lender. Confirmed by a licensed advisor.
See What You Could Save
See what taxes you could save with an IFA
Enter a few figures about your corporation and a licensed advisor will calculate your projected tax savings personally.
This is not an automated calculation — your figures are reviewed personally by a licensed advisor.
Common Questions
Before you reach out
They're related but distinct. In an IFA, the loan is provided by a third-party lending institution using the policy as collateral, rather than a policy loan taken directly against the insurer. The structure and its tax treatment depend on how it's set up.
The loan balance and terms are set by the lending institution based on the policy's growing cash value. Your advisor will walk through how the loan, interest, and policy performance interact before you proceed.
No — it generally suits corporations with stable retained earnings, a long-term planning horizon, and a genuine need for permanent insurance coverage as part of the strategy. Your advisor will tell you directly if it isn't a fit.
As with any leveraged strategy, outcomes depend on policy performance, interest rates, and lending terms — all of which can change. This is not a guaranteed strategy, and your advisor will walk through the trade-offs before you proceed.
Let’s see if an IFA fits your corporation
A licensed advisor will walk through whether this strategy makes sense for your retained earnings and timeline.