Meeting the Unique Financial Needs of Business Owners and Entrepreneurs
If you are like most entrepreneurs, you may find most of your net worth tied up in your business. It may be difficult at times to make the argument to invest outside of your company, especially when times are good. After all, it's likely the business has been your real wealth generator, not the stock market.
Entrepreneurs are unique in the sense that their problems are unique. You have more advisors than the typical person, drawing on the needed expertise of professionals across tax, legal and insurance. Every business owner wrestles with multiple issues, but one common challenge is creating a clear exit and retirement strategy. After all, if you sell your business one day you may certainly have substantial cash and assets, but where your cash flow will come from may not be as clear.
Tennyson Capital Partners is here to help. We have developed a strategy to allow you to continue making the needed investments in your business while at the same time partially funding a supplemental retirement plan outside of your company. This is a strategy for you and is not governed by ERISA. Tennyson's Leveraged Distribution Strategy incorporates the use of premium financing to fund a low cost life insurance policy that can generate significant cash value and future income potential in retirement.
The Leveraged Distribution Strategy®
This is how The Leveraged Distribution Strategy® can create a great value proposition for your retirement income needs:
- A life insurance policy is funded by borrowing premium at a low interest rate from one of our niche banks that specialize in premium financing. Each quarter, you pay the interest and a little principal for 10 years, give or take a few.
- Your current life insurance needs are covered with a permanent policy that can provide liquidity or enhance your legacy in the future.
- You keep most of your assets reinvesting in the business to grow its business value prior to retirement.
- The premiums are invested inside of a unique strategy, providing competitive returns that give you access to upside capture in the market with a cap and a floor that protects you from the negative returns from the markets.
- At retirement, a portion of your liquidity event from the sale of your business can be used to pay off the remaining loan, creating an arbitrage between the low financing rate and the return on the business.
- You begin making policy loans against the cash value of the policy in retirement, creating a significant tax-free income stream throughout your retirement.
- As long as the insurance policy is kept for the remainder of your life, the internal loans will be forgiven at death and paid from the life insurance gross proceeds.
Flexible, Customized Options for Your Retirement
We will design a tailored a strategy for you that will not require the liquidity event to pay off the loan, but will give you flexible options to solve your retirement income needs. We welcome the opportunity to help you and your advisors explore The Leveraged Distribution Strategy® and how it may be a fit for your current and future needs.