Commercial Premium Finance
Commercial Premium Finance is defined as a highly specialized form of lending. It is NOT an insurance policy. Premium financing gives businesses the opportunity to spread their insurance premium payment over a set time period at a competitive rate.
How does Premium Finance benefit agent/brokers?
- Immediate funding
- Delayed disbursements
- Integrations with agency management systems
- Online quoting up to $250,000 amount financed with a MEP of 25% and below
- DocuSign® E-Signature of premium finance agreement for insureds
- Agency online quoting ability tailored to your line of business
- Competitive rates and terms
- Specialized program pricing
- Dedicated quote team
How does Premium Finance benefit insured?
- Improved cash flow - Financing a policy eliminates a lump-sum payment to the insurance company. This preservation of capital gives the insured greater control of their cash flow, preserves credit lines, and improves their balance sheet.
- Consolidated insurance payments - Multiple policies can be placed on one finance agreement providing a single payment plan for all necessary insurance coverage. This includes insurance policies that may be added or effective at a later date.
- No lengthy approval procedures - The approval process for a premium finance transaction is generally more streamlined than that of other secured loans and is usually completed the same day.
- Fixed rate - Unless otherwise specified, the annual percentage rate remains the same for the life of the premium finance loan.
- Tax deductible interest on loans - On commercial premium finance transactions, the loan interest may be a tax deductible expense. For further information, consult with a tax advisor.
- Loan prepayment - Generally, an insured may prepay their premium finance loan at any time. In most states, early payment will ont result in additional chargers beyond the interest earned prior to prepayment.
If insured elects to Premium Finance:
- Agent/Broker obtains a premium finance agreement for the insured to review
- Insured executes PFA and pays down payment
- Agent/Broker executes PFA and transmits to BankDirect Capital Finance
- BankDirect Capital Finance
- Process the loan
- Activates the loan
- Funds the loan
- Generate statute notices
- Insured remits payment
- If the insured defaults, the premium finance company issues a Notice of Intent to Cancel and if still no payment, then...
- Issues a Notice of Cancellation
- If no reinstatement, cancellations are confirmed and follow up for return premium
- Insured Renews