Posted on: 6 July 2022
Purchasing an insurance agency or expanding an existing agency may require funding that you do not have access to. If you have been turned down for a loan through a traditional bank, seek a lender who specializes solely in insurance agency loans. A loan consultant will perform an analysis that will help you acquire the funding you need to satisfy your business goals.
A Loan Company
A loan consultant who specializes in loans for insurance companies can help a client obtain ownership of an existing or new insurance business. They can also provide guidance with securing a loan that will be used to buy out a partner of an insurance business.
A consultant will require some detailed information about a client's projected business plan. If a client already owns an insurance agency, they will need to provide details about what type of insurance they specialize in, the number of clients they serve, the annual revenue that is collected through the business, and recurring bills that they are responsible for.
An insurance loan typically uses books of business financing. Instead of using collateral to secure a loan, a loan applicant can furnish a list of recurring customers who provide their business with revenue. Renewable commissions can deem an applicant as eligible for a specific loan amount.
If a low amount of clients make recurring payments, an applicant may be eligible for a modest loan. If a high amount of clients make recurring payments, an applicant may be eligible for a large loan. Flexible repayment terms and fixed interest rates may be available with an insurance loan.
If an insurance business owner owes some existing loans, they may be able to have them refinanced through a loan provider who specializes in insurance loans. A loan consultant can help a business owner regain control of their finances, by helping them get approved for debt consolidation. A debt consolidation process involves taking out a new loan that will essentially pay off the existing loans that a customer owes.
Any funds that are left over, once the old loans have been paid in full, can be used for business expenses. Refinancing a loan could potentially be less costly than maintaining a current group of loans. If an interest rate for a new loan is going to be less than what a customer was paying on their original loans, they may benefit by choosing to restructure their debts.
For more information, contact an insurance agency such as Insurance Agency Appraisal.Share