In the hectic world of Australian business, sometimes things do go wrong. It’s a fact of life that business plans don’t always work out, and the unexpected can crop up at precisely the wrong moment, potentially damaging the future of an enterprise.
That’s why so many Australians choose to mitigate risks through the use of business insurance. There are a wide range of products available for any kind of business, large, small, growing or holding.
However, as diverse as insurance is, there is one consistent factor that will affect people whether they are in charge of an SME or a National corporation: the often-high upfront costs. This could be one of the largest expenses over the course of the year, and it all comes in one big lump sum: An issue that could end up impacting growth and the future of the business.
There is a solution: insurance premium funding. This popular funding method offers businesses a way to fulfil their insurance requirements without having to put themselves under financial stress. The way it works is that premium funders pay a company’s insurance premiums on their behalf, and the company then repays the insurance premium funder in instalments.
Rather than breaking the bank, this splits expenses up into repayments that could be weekly, monthly or even quarterly. Meanwhile, the facility itself is offered at very competitive interest rates that normally does not require any additional security. Existing loan facilities are also unlikely to be impacted, making it a simple, popular option for a vast number of Australian businesses.
There are many advantages for businesses using premium funding: let’s take a look at just a few of them.
Cash is king when you’re in business. You can have the most successful enterprise in the world, but if all of your revenue is tied up in expenses such as lump payment of insurance premiums, you have nothing to show for your success. In fact, inadequate cash flow can end up being a death knell for a business, as the Australian Securities and Investments Commission has found that it is a frequent, if not the most frequent, reason for insolvency.
However, getting a firmer grip on this difficulty is made that much easier through insurance premium funding. That single lump payment is a blockage in cash flow, and premium funding can help get things moving again. By spreading out payments, budgeting becomes more predictable, a business plan becomes more viable and finances come under less stress.
In turn, that gives your client the chance to get back or stay on track for the future of their enterprise.
In a similar vein, premium funding also provides the opportunity to retain money back in the business. Rather than constantly having to play catch-up after paying a lump sum, the company will have more consistent capital on hand.
That could be the difference between being able to hire more temporary staff and equipment for a particular client or contract and having to give it up to competitors.
Premium funding services also provide the opportunity to put more money back into the business.
Finally, there is the issue of underinsurance. Many people, whether it’s for their business or for themselves, can be tempted into purchasing the cheapest insurance and consider that they are adequately covered.
However, in reality, this can lead to the insured preferring to go for cheaper insurance coverage that might not include everything that is required for the true safety of a business. By offering premium funding, a broker can give their clients a reason to select an insurance program which has a more diverse range of covers. This way, they won’t end up having a nasty surprise should the worst happen, and discover that the lower premium amount ends up being the reason for major business hardship.
Insurance premium funding solutions are an excellent way for insurance brokers to offer peace of mind, better cash flow and overall easier business planning to their clients. In return, you get the chance to expand your own base of clients and provide diversity of your product offerings, making it possible to grow your own business at the same time.
If you’re an insurance broker who is interested in being able to offer premium funding to your clients, make sure you get in touch with us here at Attvest Finance today. We’re sure that we have the solution that’s right for both you and your clientele.
Could it be the key to providing the next level of service? Call us today and find out !!