Insurance Premium Funding

Insurance Premium Funding is a form of short-term business loan enabling your business to pay annual premiums through a flexible repayment plan. Essentially, this means you can divide your yearly lump sum payment into manageable monthly instalments.

One-off annual insurance premiums can create financial difficulties by putting a strain on your cash flow, and limit your available funds for other business needs. With insurance premium finance, you can avoid the burden of high upfront insurance premium payments and simplify working capital management.

The interest rate for this financing option depends on several factors, including the amount financed, insurance type, and finance term. Businesses can use this simple and cost-effective method for any commercial insurance, including;

• Professional Indemnity
• Public Liability
• General Business Insurance, Workers’ Compensation
• Cyber Liability Building & Contents
• Theft
• Machinery Breakdown

Just like a secured business loan, premium funding insurance offers flexibility, allowing you to consolidate all your annual payments into a single payment.

Premium funding insurance removes the burden of sizeable annual premium payments and smooth cash flow with convenient fixed monthly instalments.

Some other benefits including:

Easy monthly instalments

Your business can enjoy the convenience of easy monthly instalments. This enables you to manage your cash flow more effectively, providing extra liquidity to secure equipment and assets, operating lease, commercial hires, or any other business needs.

Improved Cash Flow Management

By avoiding large upfront payments, it helps smooth your cash flow. Spreading the cost of premiums over monthly instalments allows you to boost your working capital and maintain a steady financial position.

Fixed interest rate

Enjoy the reassurance of monthly fixed-rate repayments through direct debit. With a fixed interest rate, you can have peace of mind, knowing that your payments will remain the same regardless of fluctuations in interest rates. Your payment amount will remain unchanged throughout the agreement.

Consolidate premiums

Consolidate multiple insurance premiums, including Professional Indemnity, Public Liability, General Business Insurance, Workers’ Compensation, Cyber Liability, Building & Contents, Theft, or Machinery Breakdown, into a single finance contract. Simplify your financial management by rolling all your premiums together.

Tax benefits

In Australia, you can claim set-up fees and interest paid on finance as business expense tax deductions. Depending on your accounting structures and circumstances, the interest paid on the secured and unsecured business loan may sometimes be tax deductible. It’s always advisable to seek tax advice before making any claims.

No security required

In most cases, this type of finance does not require any collateral or security. This feature is particularly appealing to small business owners, as it allows them to access funds and spread payments without putting their personal or business assets at risk. However, for companies borrowing over $250,000, Directors’ Guarantees may apply.

Insurance finance can be used for most types of business insurance, including:

• Building & Construction
• Tradies
• Catering
• Hospitality
• Professional Services
• Legal
• Medical
• Cleaning companies
• Courier services
• Engineering shops
• Automotive
• Transport
• Removalists

Here’s how Premium Insurance Finance works:

Insurance Policy Setup:

Your insurance broker sets up your policy as usual. You provide us with the insurance policy details and annual payment information

Finding the Right Lender:

We source the most competitive lender for your situation and apply for finance on your behalf. We can also help you consolidate different business insurance premiums into a single finance contract

Finance Contract Arrangement:

Once approved, we arrange a finance contract between you and the lender

Lump Sum Payment:

The lender pays your insurance company’s premium in one lump sum

Monthly Repayments:

You make simple and affordable fixed monthly repayments over the term of the premium, typically ranging from 6 to 12 months

After sourcing the most competitive finance available, we’ll prepare the application and negotiate the best terms on your behalf.

Here are the four steps involved in the premium insurance funding process:

Insurance Policy Setup

To secure financing for your insurance policies and assess your financial situation, your business submits an application to the lender, including relevant details and any required collateral. The lender carefully evaluates the risk involved and determines whether to approve the loan.

Application and evaluation

Your business applies to the lender, providing information about the insurance policies you wish to finance, your financial situation, and details of any necessary collateral. The lender evaluates your risk and decides whether to approve the loan.

Sign off the loan agreement

Your lender will provide you with an agreement outlining the rates, terms, and conditions of the financing arrangement. Once signed, the finance company will pay the insurance premiums on behalf of your business directly to the insurance company in one lump sum.

You pay in monthly instalments

Your business pays monthly instalments to your lender over the life of the premium according to the terms outlined in your agreement. These repayments typically include both the principal and interest.

Loan Repayment and Termination

Once your business has successfully paid off the principal balance, along with the accrued interest and fees, the loan will be considered fully repaid. At this point, you have the option to either refinance the loan or establish a new insurance premium funding arrangement annually.

Am I eligible for PF Insurance Australia?

You are eligible if your annual insurance costs exceed $5,000 and you prefer to avoid upfront lump sum payments.

Regardless of the size or industry of your business, we provide premium insurance funding to fulfil the insurance needs of all businesses.

We know that different businesses have different requirements, that’s why in addition to insurance premium finance, we also offer the following SME business loans tailored to your needs:

• Line of credit loans
• Chattel mortgage loans
• Finance lease
• Debtor finance
• Trade finance

Lenders will require a basic understanding of your business activities, premises (if applicable), number of people working in the business, and estimated annual turnover. Essential documentation will include the following:

• Current ABN and ACN
• Current identification documents
• Business address and contact details
• Copies of your current insurance policy documents

Providing the correct documentation is essential for lenders to gain a true and accurate financial picture of your business transactions. It’s crucial as it establishes your creditworthiness and their decision to provide or not provide finance.

You’ve got a lot on your plate. As an experienced broker, Cabbage Capital brings the specialist knowledge to help your business navigate the process as smoothly as possible.

Make your application simple

We aim to make the application process as easy and efficient as possible. So you can focus your energy on your speciality – running your business.

Talk to us about your requirements

Share your insurance company’s annual insurance policy and paperwork with us. We can also help you consolidate different business insurance premiums on one finance contract.

Get the best finance for you

We’ll find the most cost-effective finance for your situation from our network of 30+ lenders and prepare documentation for a successful application with your approval.

Gain approval and smooth cash flow

We source finance and prepare your application in as little as five business days. You switch from annual lump-sum premiums to monthly installments and smoother cash flow.

Here at Cabbage Capital, we have a distinct advantage that sets us apart from the rest. Our founder and principal broker, Brin Hayden, boasts over 20 years of experience in the commercial sector, specialising in providing impactful solutions for small to medium enterprises.

“I appreciate that no two businesses are the same. Every solution we deliver is custom designed for each client. I’ll take the time to understand your unique circumstances before talking you through the insurance premium funding available.

Unlike banks or single product providers, we source finance from our network of 30+ lenders competing for your business. This gives us access to lower rates and more flexible terms for our clients. I bring in-depth knowledge of the lenders, options, and facilities open to you. We’ll shop around to identify and source the ideal package and arrangement for your requirements. And then negotiate the best rates and terms on your behalf.
cd
So, if you want to take away the burden of large annual premiums and free up your cash flow, or you want to know more, talk to me.”