When considering how to pay a significant lump-sum such as business insurance cover, it’s not as simple as ‘have we got the available cash or credit?’ Specialist premium finance can be a compelling option, particularly where you’d rather reinvest cash into the business rather than depleting your reserves.

The following are a number of reasons why individual consumers and business customers choose to pay for their insurance using premium finance:

  • Improved cash flow – freeing up the lump sum to use elsewhere ensuring customers have the required level of insurance cover without being held back by the upfront cost.
  • Lessens the impact of any increase in insurance costs. 
  • Eliminates the requirement for a large upfront payment to an insurance company, particularly for new purchases.
  • Multiple insurance policies can be attached to a single premium finance agreement allowing for a single payment plan.
  • Avoids the need to liquidate other assets to ensure insurance coverage by using other people’s money (leveraging the premium finance lender’s capital), customer can retain a significant amount of capital known as ‘retained capital’.

Gen2 can provide a simple tool to assess the relative benefit of reinvestment versus the costs of finance. When taking into account the facts that the vast majority of premium finance is off-balance sheet lending and that several policies (with the same inception/renewal dates) can be consolidated under one credit agreement, many opt for premium finance as a smart way to manage cash-flow.

Our partnership with Premium Credit allows our customers to take control over their Finances. Premium Credit is the leading provider of premium finance in the UK and currently helps over two million individuals and businesses spread the cost of their premiums.

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