Premium Financing is the perfect way for businesses to pay an insurance premium over time rather than all up front. Premium Finance is simple, it is a loan that takes into account the underlying value of the insurance coverage and leverages the unearned portion of the policy for collateral. Finance Companies operate similarly to a bank, meaning that they loan out money that is to be paid back over a certain period of time. It is a pretty straight forward process that typically involves a 2 page contract and funds the insurance policy within 24 hours of acceptance. There are many benefits for a business to choose premium financing. It will allow businesses to fund other necessities without totally liquidating their assets. Most importantly it helps with cash flow. While there may be a need for premium financing, the fact remains that it is still a choice as to whether or not to use a company. If financing is the route you are leaning toward, there are a few things to make sure that your company offers, and at Capital we provide all 3.
You want to make sure that you can have live customer service. Premium financing can be confusing. It is important that you choose a finance company that will have a live representative on the other line when a question arises. They should have a 24/7 online presence that offers tools and after hours payment options. You want to have a finance company that offers automate quote integration. This will give the best rates possible when potential customers have inquiries. Flexible term options can be beneficial for different types of policies and coverage amounts. Offering flexing term options can go a long way to help customers. By taking every loan on a case by case basis you are letting your customer know that you understand their needs and are willing to create a customized payment plan.
Remember the saying “You can’t have your cake and eat it too.”? This typically suggests that you can’t have the best of both options. But in terms of the insurance world, insureds actually can have their cake and eat it too. They are able to have the coverage that they need and not have to tie up all their cash flow. They are able to manage and grow their business while making monthly payments. There are a few questions to ask yourself before deciding if financing is the best option. How do you plan to cover your insurance costs for the year? Do you have credit lines and what costs are associated with these? Do you anticipate any unusual cash flows? These questions can help start the discussion as to whether financing is the best option for you. Businesses need to be run with an efficiency and ease that allow room for growth. Financing can be the miracle answer that will allow that growth to happen and not bring on so many of the burden associated with operating a business and handling the cash flow.