Insurance Premium Finance is often a service that business operators overlook or are not familiar with when it comes to preserving & managing their working capital.
The funding of large lump sum insurance premiums is a convenient & simple way to preserve business working capital by spreading insurance premium payments over a term that suits cashflow.
Benefits of Insurance Premium Finance
- Manage your insurance expense on a monthly basis instead of having to come up with a lump sum.
- Release cashflow tied up in annual insurance premiums for other more valued business purposes or investment.
- Possible tax benefits as interest charges may be tax deductible.
- Funding that is easy to obtain when compared to other traditional bank lending alternatives.
- Loan security requirements typically do not require collateral security where alternative bank loan ‘line of credit’ type products may do.
What type of Insurance Premium’s can be funded?
Insurance Premium funding is available for most types of commercial insurance including:
- General Business Insurance
- Professional Indemnity Insurance
- Workers Compensation
- Public and Products Liability Insurance
- Motor Vehicle Insurance
- Plant & Equipment Insurance
- Construction Insurance
Your Business Finance Broker can answer your questions about financing of other commercial insurances that are not on the above list.
Other large sum business expenses that can be financed
Professional Fee Funding
There are some lenders that also use the same service for funding Professional Fee’s like your accountant’s annual invoice.
Businesses with large registrations costs for fleets of vehicles, trucks or prime movers, may also choose to utilise a similar type of lump sum lending.
Please ask your Business Finance Broker about financing of other lump sum business expenses.
A very easy finance application process
In the case of the majority of financiers, your business simply needs to provide an Insurance Premium Invoice to commence application and subsequent assessment for approval.
In many cases, when requesting a quote request by providing the Insurance Premium Invoice to the lender, the lender will quickly & simply return the required finance documentation outlining the repayments for you to sign and accept.
Security Requirements for Insurance Premium Finance
It depends on the chosen financier and the amount of lending required, however in most cases collateral security is not required and in some cases company Director guarantees may be required.
Businesses may find this an attractive alternative to using a traditional business overdraft or a business line of credit which have been secured by real estate or a charge over the businesses assets.
Who provides the insurance premium funding?
Funding is provided by selected Australian Banks & Financiers. The insurance premium types that can be funded, varies between lenders. Some of the lenders will also provide the same service for funding Professional Fees and Truck & Vehicle Fleet registrations.
Lenders will compete against each other for a customer’s business when presented with a funding opportunity from a business finance broker.
The process is quick and easy. Talk to us about the funding options available to you via a range of Banks & Financiers to help free up your working capital.
Choice doesn’t have to come at a cost
Many business finance brokers don’t charge the customer a fee for their service, rather the lender pays the broker for work that the lender themselves would have otherwise had to bear the cost of.
See here for more information about how an equipment finance broker is paid.
For your next business loan, you may consider using the services of a business finance broker, well versed in business finance to do the leg work for you, providing you with not only choice and flexibility, but a no-fuss easier solution.
Disclaimer: The information in this article is not intended to, and should not be relied upon, to provide tax, legal, investment or accounting advice. You should consider whether the information is appropriate to your needs, and where appropriate, consult your own tax, legal, investment or accounting advice.