How Big General Contractors Use Infinite Banking to Keep Cash, Keep People, and Keep Control
If you run a large general contracting firm, you already know the game: heavy payroll, expensive mobilizations, slow pay cycles, thin margins, and a dozen stakeholders who all want a decision yesterday. In that world, cash control isn’t nice to have; it’s survival.
Here’s a quiet edge most contractors aren’t using: build your own banking system inside the business by placing high-cash-value whole life policies on partners and key people. This isn’t about selling insurance. It’s about creating a private, tax-advantaged pool of capital you control, while solving retention, buy-sell, and succession at the same time.
What I Mean by “Infinite Banking” (IBC)
We design participating whole life policies for cash value first (not max death benefit) through mutual carriers. The company owns and funds the policies (often with paid-up additions). Cash value grows predictably, can be accessed by policy loan, and continues compounding even while you use it. Death benefit sits in the background as protection and a future liquidity event.
Result: a multi-use corporate asset you can tap without banks, committees, or market drama.
1) Liquidity Without the Bank Line
You need cash for mobilization, materials, change orders, or to float receivables. Bank lines come with covenants, renewals, and rate risk.
With IBC: cash value across several company-owned policies becomes your internal reserve. You can borrow in days, set your own repayment pace, and keep projects moving, without interrupting compounding inside the policies.
2) Fund Your Buy-Sell the Smart Way
What happens if a partner dies, is disabled, or wants out?
With IBC: policies on each partner create tax-free death benefit to fund the buy-sell, no fire sale, no emergency debt. While everyone’s alive, the cash value doubles as a corporate savings bucket you can use for the business.
3) Golden Handcuffs That Actually Hold
Superintendents, estimators, division leads, CFOs, when they walk, it hurts.
With IBC: place a policy on a key employee (with consent), grow the cash value, and tie a retention bonus or deferred comp to tenure and performance. Stay = benefit. Leave early = the company keeps the asset. You improve retention and strengthen the balance sheet at the same time.
4) A Better Place for Surplus Dollars
Retained earnings get taxed. Idle cash erodes. Market risk is real.
With IBC: redirect surplus into policies where growth is tax-deferred and accessible by loan when needed. It functions like a corporate reserve with better efficiency, and built-in protection.
5) Succession and Legacy, Already Funded
Whether you’re grooming an internal successor, planning a family transfer, or eyeing PE, transitions require liquidity.
With IBC: partner policies create tax-free dollars on day one of a crisis. Use them to buy out heirs, cover estate needs, or simply stabilize operations while leadership changes hands.
A Quick Example
A $100M GC funds four policies, on three founders and the CFO, at $100k/year each for five years. Ten years in:
$2M+ combined cash value available for project float, equipment, or retention packages
$10M+ total death benefit earmarked for buy-sell and succession
Bank dependence down, flexibility up, and a real incentive structure for the people you can’t afford to lose
Sophisticated, Not Speculative
Family offices and blue-chip brands have used versions of this play for decades. The secret isn’t “a policy.” It’s how you own it, fund it, and use it, as a corporate system that compounds quietly while you build.
Bottom Line for Large GCs
Think like a bank, not just a builder. With IBC structured on partners and key employees, you get:
On-demand access to capital
Real control over risk and timing
Tax efficiency on growth and access
Internal financing for operations, retention, and deals
Continuity when life happens
Few contractors are running this play. The ones who are? They’re navigating volatility with less stress and more control, and they’re keeping more of what they earn.