Pay business insurance by the month
Cash flow is the key to business survival. Without sufficient cash flow it becomes very difficult for even the most profitable business to avoid financial disaster, or at the very least achieve its true potential.
When economic times are challenging, business owners should be seeking ways to improve their cash flow and preserve their working capital at every opportunity. One of the easiest ways to do this is by paying your business insurance by the month.
Most forms of insurance can be paid via a monthly payment plan either direct with the insurer (if available) or a premium funding facility arranged by your insurance broker.
Paying direct with an insurer that offers monthly payments at ‘no cost’ may seem like the easiest option, however if you have multiple policies with different insurers, this can be cumbersome with multiple debits each month. The cover offered through an insurer’s pay-by-the-month facility may also vary. Your broker can help you ensure you understand the right option for your business.
Premium funding companies lend you the amount required to pay your insurance premium and pay it on your behalf. You can even combine multiple premiums into the one loan. You then repay the premium funding company in monthly instalments over a period of typically 10 months.
The premium funding company charges a flat interest rate on the amount of the premium that is fixed for the term of the loan. The interest charge may be tax deductible as a business expense, however you should discuss this with your accountant.
When obtaining quotes it is important for you to ask your broker about any additional service fees that may apply. Some companies will charge an application fee in return for a lower rate over the term of the loan. To ensure you are getting the best deal always compare the bottom line.
Finally, because the loan is secured by the insurance policy in most cases, no security is required. This ensures that applications are simple and processed quickly – usually within 24 hours.
Preserve your business cash flow. Talk to City Rural Insurance Brokers about the benefits of premium funding for your business.