An investment that combines a life insurance policy with a mutual fund. The fund shares are used as collateral for a loan to pay the insurance premiums. Equity funding gives the investor the insurance protection benefits along with potential investment appreciation.

The equity monies that are used in a lease transaction by the equity investor to partially pay for the leased equipment. The balance will be paid through some form of debt.

Equity Funding Corporation of America was a Los Angeles-based U.S. financial conglomerate that marketed a package of mutual funds and life insurance to private individuals in the 1960s and 70s. It collapsed in scandal in 1973 after ex-employee Ronald Secrist and securities analyst Ray Dirks blew the whistle on massive accounting fraud, including a computer system dedicated exclusively to creating and maintaining fictitious insurance policies. Investigation found that from 1964 onward, as many as 100 company employees had engaged in organized deception of investors, auditors, reinsurers and regulatory authorities.