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IN ORDER TO MAKE FAST CRITICAL MOVES, you need financial solutions that are as adaptable as your business. If you own a life insurance policy, the good news is there’s a chance you may already be sitting on the financing you need to grow.

“Often, business owners have had insurance for many years,” says Donald Douglas, Regional Account Manager, Manulife Bank, in British Columbia. “The cash surrender value (CSV) has likely grown to a point where they have substantial money tied up in the insurance.” With the appropriate lender, you can access that money on a very cost-efficient, convenient basis. Two loan types that use this strategy of leveraging against insurance are cash surrender value (CSV) loans and policy loans. With both, you’re essentially borrowing from yourself, and there are benefits and challenges with each.

A CSV loan allows you to borrow up to 90% of the cash surrender value of your policy. Like a line of credit, you can write cheques against it, draw it down when you need to and repay it when you’ve got surplus funds—a huge benefit when it comes to saving interest. It’s also typically not taxable, and you only have to pay interest back. However, your death benefit is reduced by the amount you extract. These types of loans can take anywhere from three weeks to a few months to put in place, so, if you need cash quickly, you might want to look at other options.

On the other hand, a policy loan may be acquired in just a few days. “Many insurance policies have an agreement that the client can borrow from his policy at any time,” says Douglas. “The downside is that the rates are usually quite a bit higher.” Another disadvantage is that, if a policy loan grows too large, CRA may deem that the growth in the policy’s CSV is taxable.

Leveraging against permanent insurance is a strategy that works if you’ve got need for cash with some flexibility: “Entrepreneurs may be paying higher rates or heavy service charges to get access to a line of credit at a bank,” says Douglas. “The beauty of the CSV program especially is that you can borrow at a competitive rate.”