Business Cash Advance & Business Financing Alternatives 

Making Annuities Work In Your Financial Planning

US Business Finance Corp (USBFC) recently added insurance programs and annuities to their credit card processing and merchant cash advance financial services available to owners of small to mid-size businesses. Acting as insurance policies, annuities provide retirement finances to business owners and people planning their retirement income strategy.

With the reverberations of the huge “market corrections” affecting many IRA and 401(k) retirement plans, business owners are finding annuities tied to their retirement plan can distance them from the gyrations of the stock market.

USBFC works with business owners to assist in planning a financial strategy that includes a retirement plan or a Private Employer Benefit plan for accruing and distributing a small business owner’s or their employees’ retirement savings with a tax deferment on any increase in the investments. Annuities combined with related IRS retirement programs offer several methods of building equity faster than traditional 401(k)s. Each business owners’ financial needs and situation are different, so the financial advisers at USBFC take the time to match your needs and your business to the best retirement plan.

Annuities come in two variations: an immediate annuity or a deferred annuity. State law regulates annuity contracts since they are contracts issued by life insurance companies, but defined by the Internal Revenue Service for how they are handled for federal tax filings. Annuities, like certain insurance policies, have two phases: clients initially pay into an account and accumulate equity (deferral phase) followed by the period when the client receives disbursements from the account for a predetermined time period (the annuity phase). Contracts with a very short funding period and a long payment period are known as “immediate annuities”.

Deferred annuities come in two styles: fixed deferred annuity and variable annuity.

A fixed deferred annuity means the growth of the underlying investment vehicle is tied to something stable like an interest rate. A variable annuity is one where the investment may be in stocks or bonds. In variable annuities, the principle is not guaranteed and, similar to any investment in the market, the account could possibly lose value (do worse than a fixed deferred) or gain value at a greater rate than it would have if simply tied to an interest rate.

The tax advantage for small business owners and employees is that the tax-deferred compounding of any capital gains allows for a faster and greater accumulation of wealth. Contact our financial advisers to see the potential benefits your business and employees receive from our insurance, annuity and retirement plans.

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