Posted on January 07 2019
By Michael Hession.
Attention All Legal Cannabusinesses: There May Be A Solution To Your Banking Problems, Even If You Don't Have Any.
As I'm sure most of you know, there are many hard-working commercial cannabusinesses throughout the country that are unable to find banks to work with. In fact, some 70% of them don't even have bank accounts! This has caused businesses to hoard cash, hire security details to protect it and actually pay their taxes to the IRS in cash - which is hard to believe in a country like the U.S. in this day and age.
We are still in a massive grey area for growers especially, and really any company that they may deal with, given the federal laws that are currently in place. Until and unless regulators within the Treasury Department step up and make changes to the liability concerns that lending institutions have, or if Congress steps up and does something about it, there will remain a lot of uncertainty. As of this writing there are some bills being introduced in Congress to address these issues, and will likely be debated in early 2019.
The good news is that companies within the burgeoning cannabis industry, whether or not they're able to have bank accounts, may have a viable option for their financing dilemmas - especially when it comes to storing their money. Most people, let alone cannabis-related businesses, are not aware of this option. Thus, the reason for this article, as I believe that everyone should know that this is available to them once fully understood.
This financial strategy allows individuals, families and particularly businesses to operate as their own "banking system". By taking advantage of a specific type of life insurance policy using dividend-paying, participating whole life insurance, ideally with certain mutual insurance companies, it is possible to receive the benefits of the banking business the way that banks benefit from us! Originally introduced to the general public in a book entitled "Becoming Your Own Banker" by R. Nelson Nash, the idea of the "Infinite Banking Concept" was created!
So, what are the benefits of operating as your own bank you might ask? Well, you may or may not be aware that banks can lend out 10 times the amount they receive in deposits. So, if you were to deposit $100,000.00 into a typical savings account, said bank could lend out $1,000,000.00 (that's 1 million) worth of loans based on that original $100,000.00 that you deposited. That means they earn interest on all of those loans and what exactly do they give you in return? While there are higher interest rates based on how much is deposited, the average interest rate for a savings account is 0.09 % APY! When you have your own banking system your money can grow at a guaranteed 3%, earning compound interest all the while and along with the dividends applied, that number can reach 6-7% interest. And because we use only mutual insurance companies, there are no share holders to satisfy or share prices to worry about. These companies are not publicly traded and thus are not directly affected by the gyrations of the stock market! Policy holders, not share holders really 'own' the company.
Here are some other benefits from utilizing this strategy:
1) Complete ownership and control of your policies - You own your policy, or policies, not the insurance company. They're just the stewards of it.
2) Tax-free access to your cash value to pay down debt, make purchases that would typically be financed through a lender, etc. You call the insurance company and ask them to send you a check, they do not ask what it's for, what your credit score is, or anything of the like. You use it as you see fit and your money is still in there earning compounding interest; that borrowed money doesn't come out of your cash value - it's a low-interest loan from the insurance company's general account. And you set the terms to pay it back or not!
3) Really, when you think about it, there are typically two ways in which most people pay for goods and services: One, they pay out of pocket on the money they earn, and while they get the goods or services, the money is gone and never to be seen again. Two, they finance through a lending institution and pay interest for that privilege, often going into a never-ending spiral of indebtedness. With the "Infinite Banking Concept" we can have our cake and eat it too, where like a bank we can earn multiples on the money we have stored for our own benefit and ultimately cut the banks out of the equation completely.
4) Finally, my partner and I have relationships with many of the mutual insurance companies that we utilize for our clients using IBC, and unlike many banks they are willing to work with companies in the cannabis industry that are cash-only. As long as it's a legitimate business and can be demonstrated as such, there are ways to set up money market accounts and the like to fund the policies and grow your own bank. Unfortunately, the insurance companies are not allowed to take cash for premiums, although there are ways to work around that. Why, there are even strategies for earning money on the funds that businesses set aside to pay their quarterly taxes!
If you're interested in learning more about some lesser-known, legal banking alternatives for cannabusinesses, please contact me at firstname.lastname@example.org or text me at 401-354-9902 to set up a free, no-obligation consultation. I want to be clear that I am talking about the ability to set up a banking system here - almost like a super-charged savings account with regular deposits in the form of premiums, death benefits and access to your own capital, as opposed to credit card processing, which I understand is a problem for cannabusinesses as well. This is life insurance after all, but not in the way we typically think about life insurance.
We are friendly, honest and will let you know right away whether or not this strategy is a good fit for your business or not. My partner and I have a combined twenty-plus years of experience in helping people to learn about, understand and implement the 'Infinite Banking Concept'.
Michael Hession is the manager of the Personal Debt Liberator program for Liberty Group, LLC and is a licensed life insurance professional specializing in the 'Infinite Banking Concept'. Michael has an almost thirty-year history of satisfied clients who know they were taken care of, listened to and honored. He can be reached via email at email@example.com or via text/phone 401-354-9902.