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Cornering a Market: A Business Owner Expands His Operation with Whole Life Insurance
At the age of 43, Jay Scanlon owned a successful dry cleaning business in Kingston, NY. The business was doing well and Jay was looking to expand and acquire a local competitor. Like many business owners, however, he didn’t have the cash available to make the acquisition.
"I saw an opportunity to expand my business and corner the market. Growing the business would put my family in a good place financially and allow me to retire sooner and more comfortably," said Scanlon. "But I needed to figure out how to fund it."
Scanlon turned to David Suckey, a Financial Representative with Guardian agency C&A Financial Group, and the two developed a plan that would allow Jay to open up a line of liquidity to buy his competitor and have his family stay protected.
"Dave recommended I use my life insurance portfolio," said Scanlon. "With my whole life insurance, I was able to use the cash I accumulated over the five years I had the policy and use the policy itself as collateral to secure a bank loan to cover the rest."
Jay funded 30 percent of the purchase price of the acquisition with the cash value built up in his whole life policy. Governor Clinton Cleaners is now the largest dry cleaner in Kingston. Four and a half years later, with his income nearly doubled and his whole life policy still growing, Scanlon’s legacy is protected and his business continues to thrive.
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