Being an insurance agent or running an insurance company is not a child’s play. As this job involves a massive amount of interaction with concerned families, excited individuals, and well-established and flourishing multinational companies, so you must possess some characteristics – excellent customer service, emotional intelligence, honesty, persistence, and knowledge about whatever you do. These qualities or personality traits, along with financial stability, are important to run a successful insurance company. We are confident that you already possess the very traits; we are here to help you out financially. You could use a little help from small business loans to manage the cash flow, stock up the inventory, or to cover the rent and payroll. If you are a passionate insurance agent, you can easily qualify for the insurance agency business loans.
What are my options?
When you are looking for external funding, you have a wide range of financial options you can benefit from – traditional and alternative lenders. If you are considering traditional lender, then don’t get your hopes up! We are saying this not because we doubt your credibility as an insurance agent, but because traditional lenders i.e. banks consider insurance agencies as high-risk borrowers. Even if the bank decides to offer you the loan, it will offer you a business loan at stringent terms.
So, why waste with traditional lenders, when you can get an affordable, reasonable, user-friendly loan from an alternative lender? Have a look at ideal business loan best suited for insurance agencies.
- A Business Line of Credit to meet the daily expenses.
Need never-ending access to a pool of funds – the revolving credit? Apply for a business line of credit, and you can withdraw as much money as you need from the credit line. Because of the two main characteristics: access to the massive amount of money, and the other is that you only pay an interest rate on the amount that you use.
For example, if lenders approve you for $200,000 credit lines, you take out $50,000 to pay the rent and cover salaries of the employees. Once you make the repayment including the interest rate, your bank account will charge back to $200,000. In addition to this, if you need funds in one day, then a business line of credit is the perfect business loan for your insurance agency. Other than a business line of credit, insurance agents can get benefit from various other small business loans as well.
- Equipment financing to keep all the machines and gadgets up-to-date.
Many lenders assume that they can only apply for the equipment financing when they need to purchase a heavy-duty machine or a vehicle. You can apply for the equipment financing even when you are running out of funds to purchase the tables, chairs or minimal office furniture. Other than this, if you feel the need to update the technology, you can take advantage of equipment financing.
Applying for equipment financing is a walk in the park even if you have a bad credit score. Equipment loans or equipment financing does not need separate collateral, the equipment that the borrower intends to purchase acts as the collateral.
In addition to this, you can have access to these funds in no time; all it takes are two to three business days. Even if your equipment got delayed a bit, keep thinking about the fact that you will be able to update all the nuts and bolts in the coming days.
- Invoice financing for an extra infusion of cash flow!
If you are involved in the trade credit, meaning you give some time to your customers to make the payment, then you must have some outstanding invoices in some corner of your office. Running an insurance company is a demanding task; extra cash flow can help you get rid of any financial problem. One way to increase the cash flow is through invoice financing; the lender will finance 85% of the outstanding invoices, and once the customer makes the pending payment, the lender will give back the remaining amount. At times, it might sound like a risky move but weigh all the pros and cons before making a final decision.
If invoice financing can help you keep the business wheel turning, then it is a risk that you must take!
- SBA Loans to keep the machine running!
Other than a business line of credit, invoice, and equipment financing, there is another option: Small Business Administration. As SBA loans are government-administered loans, so they might need a perfect financial position but you must try your luck anyway. The loan term of the SBA loans can go up to 10 years if you are applying for an SBA 7(a) loan. You can also use the funds to purchase a commercial real estate; the repayment terms of these loans are higher. In some cases, they can go up to 25 years. Other than this, you can use the money in the following ways:
- Use the 7(a) loan to expand your business, either take over another insurance agency or you can purchase some notable clients from another insurance company. Your pick!
- Let the business loan take care of the construction costs, insurance company license fee, other mandatory expenses and you can open up an insurance agency at another location.
- You can even use the funds to pay any previous or pending debt.
- Dive into the stream of funds and gather enough funds to pay your employees on time. Lastly, if you are still left with some amount, you must spend it on the training of the employees so that they are well-equipped to deal with the customers.
So far, we have covered lines of credit, invoice financing, equipment financing, and government-administered Small Business Administration Loans as of the ideal small business loan options for an insurance company. Apart from these, there are many other Insurance loans; you just have to pick the most suitable one. If you need funds to cover the costs of daily operations, then pick a loan best suitable for that particular need, Likewise, if you need to repair a broken printer, apply for equipment financing. To apply for the insurance agency business loan, you must have the following documents:
- Driver’s license
- Pending invoices
- CFS (cash flow statement)
- Business and personal credit score report
- Business and personal tax return documents
Merchant Advisors is adequately equipped with numerous business loans for your insurance agency. So, if you are an insurance agent who is on the hunt of a small business loan, head over to the official website, and applies for the business loan. If you need more tips and tricks to run a financially stable and successful insurance company, follow us on Facebook (@Onlinecheck) and Twitter (@Onlinecheck). If you have any question, feel free to call us on our toll-free number at (833) 827-4412, our loyal and keen financial advisor will answer your every question and guide you throughout the way.