Insurance premium financing isn’t just for top-earning companies

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In the aftermath of COVID-19, the number of challenges facing businesses and individuals in the current insurance marketplace are abundant. A key reason why this is the case is because the insurance market has hardened drastically.

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Essentially, this means that supply has dropped while demand has remained constant, so businesses have had to absorb the cost of increased insurance premiums. Unsurprisingly, this has impacted small businesses substantially because they are not likely to be sitting on that security blanket of extra capital that would enable them to pay their insurance premiums in full.

Although this sounds grim, there is a lot of hope for small businesses. Our Managing Director, Delarey van Dyk, featured in FA News Magazine’s June 2021 edition, explains, “Although the Fulcrum group of companies was always the leading provider of premium finance before the pandemic hit, the pandemic brought to life how effective this solution really is. It is a financing solution for businesses during tough times. With businesses having to pay higher insurance premiums, all while their cash flow and turnover has decreased, it means they are going to require premium finance now, more than ever.”

Despite smaller businesses being particularly impacted in the aftermath of the pandemic, many small business owners remain conservative with cash transactions, and are therefore hesitant in considering other options available for their insurance planning. However, as van Dyk explains:

Premium Financing is an option that should be considered by all businesses, regardless of the size or sector.
In fact, insurance Premium Financing can serve as a small business saviour, and small business owners would do well to adopt the mindset of many business owners operating in the financing sector: “cash is king, but leverage is used for the rest.”

Just how can insurance Premium Financing serve as a small business saviour?

Insurance Premium Financing helps owners avoid financial struggles down the road that are often caused by poor financial planning. This is because it gives you the option of bundling multiple insurance policies into one monthly plan, with a single payment at a much more affordable monthly rate. This makes monthly budgeting a lot easier and less stressful because you’ve only got one insurance premium to anticipate. In turn, this creates a solid financial foundation for the business, and provides you with greater cash flow (and peace of mind) while your business is getting back on its feet.

Insurance Premium Finance isn’t just for the big, top-earning businesses. It’s a way for businesses of all sizes to use leverage to get the amount of insurance coverage they need – not just the amount they’re willing to pay for.

With Fulcrum, the process of initiating a Premium Finance facility takes no more than 24 hours, so chat to us today to find your optimal solution.

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    How do brokers decide if Premium Finance is right for their clients?
    Brokers should consider Premium Financing for all their clients that have sizeable or complex insurance policies.