Facility Plan
What Does Facility Plan Mean?
A facility plan is a loan option provided by a bank to clients who own or operate a business. This loan can be short-term or long-term and is designed to finance operating capital or other capital requirements for the business. In the context of insurance, borrowers may explore different types of loan protection insurance to safeguard their loans.
Insuranceopedia Explains Facility Plan
Business owners can select from various facility plans provided by different banks to meet their funding needs. This process of borrowing is referred to as debt financing, where the borrowed funds are intended to increase operating capital. Individuals with a facility plan are advised to consider loan protection insurance, which ensures that payments on the insured debt are made in the event of injury or death. There are four main types of loan protection insurance: credit life insurance, credit disability insurance, involuntary unemployment insurance, and credit property insurance.
