When it comes to business and commercial insurance, most insurance companies do not offer a monthly payment option. This however, does not mean that you can’t find a way to make monthly payments. It will just be through a different business. Capital offers Premium Funding or Financing to businesses that will allow businesses to make monthly payment on their large insurance policies. Capital will pay the entire premium on behalf of the business. The business then has to pay back the finance company over the course of 9 months. There are many benefits for the insured choosing this option. They are able to spread the cost of their insurance premium over a longer period of time. They are able to pay for multiple insurance policies with one monthly payment. They will be able to smooth out their monthly business cash flow.
So how does it all work? The insurance agent will implement the insurance policy as per usual. But instead of receiving an invoice that needs to be paid, there will be a contract that you sign with Capital that will be the start of a loan to pay for the policy. Capital will then fund the full premium to the insurance company and your 9 monthly loan payments will start soon. There will be an interest rate associated to this loan. It will be a fixed interest rate and you will be made aware of the rate when signing the contract with Capital.
The most important thing to realize is that by financing your insurance policy with Capital, you will be paying more for you policy verses if you paid it all up front. As mentioned earlier, there is interest attached to this loan. It is also important to note that if you cancel your insurance before the policy term, you are still responsible for your monthly payments until the returned premium is received by Capital. As a generalization it can take one to two months for Capital to receive the returned premium. If you were to not make your payments, you would accrue fees that will be taken out of your return. When you sign the contract with Capital, you are entering into a formal agreement that you will pay back the loan and any fees associated with the account.
So ultimately the decision is whether or not you should use premium financing. If it is beneficial to your business to spread out the cost of your insurance coverage over 9 months rather than paying all at once then Capital is here to help. Even if you do have the cash flow to fund your own policy, it may be more beneficial for your business to use that money to make improvements or invest in other areas of your company. Cash flow can be a major concern for most businesses, and it is best to determine where your cash is best put to good use. You want to make sure your business is in a position where it can grow and be profitable.