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As a business owner you are faced with large financial obligations. Insurance premiums are often one of the biggest. Having adequate insurance coverage is very important to protect your business against unexpected events such as; loss or damage to your property, legal claims, and workplace injuries for example. Inadequate insurance coverage can be a costly mistake, but with the large upfront cost associated with many insurance policies, many business owners prefer not take out the cover. We see many business owners willing to “take on the risk”, to avoid having to pay the large upfront insurance premiums.

Insurance premium funding is a great option to spread the upfront payment of insurance premiums over a specified term, usually between 1 and 12 months. The product is very simple, the large upfront premium is paid by the lender on your behalf to the nominated insurer. Your business then in turn simply repays the loan with principal and interest repayments over the specified period.

Best of all, the interest repayments may be tax deductible. Understanding your cash flow is the key to success in any business. Insurance Premium Funding is another was to help better manage your cash flow.

By Ryan Tripi, Finance Broker