Insurance agents who are looking to grow or sell their business or consolidate debt often have difficulty finding the right lending solution. That’s because most banks and other lenders don’t understand the nuances of the insurance industry and how cash flows are structured. Fortunately, a new insurance agency loan program makes finding access to business capital much easier, giving agency owners a fresh alternative when looking for funding.
Agencies may need access to capital for a number of reasons, from upgrading computer equipment or expanding office space to consolidating debt or structuring an agency buyout. Traditionally, banks require hard assets as collateral for a business loan—a request that can be easily met in industries like manufacturing or construction, where inventory, equipment, or even cash reserves can be used. But insurance industry cash flows are driven by commissions, and aside from office equipment and furnishings, many independently owned agencies have no hard assets to offer as a guarantee toward a loan. Not surprisingly, agency owners often find themselves putting personal assets at risk as part of the deal.
Financing Options for Agency Owners
Fortunately, a new loan program that is perfectly tailored to meet the needs of insurance agency owners has made it easier to put funding in place. The loans, which are provided through one of Springtree Group’s contracted underwriters, offer a host of benefits for different financing scenarios for qualified borrowers:
Quick turnaround – An express application process means that loans up to $75,000 can be approved in as little as 24 hours.
Acquisition funding – Conventionally financed loans from $50,000 to $2 million are available for those looking to purchase an insurance agency. The non-SBA notes are offered on a 10-year term with $75,000 in working capital.
Debt Consolidation – Agency owners can leverage equity in their firm to consolidate business expenses. Loans as high as 65 percent of annual earnings can be used to boost cash flow and decrease expenditures.
Commercial Real Estate – Loans of up to $5 million are available to refinance or purchase commercial real estate with a 15 percent down payment. Terms include payment schedules of up to 25 years, no payments for the first 6 months, and a 12 month interest-only option. (Interest rates are only in single digits.)
For any of the above lending options, no agency valuation fee is required, there are no prepayment penalties, and closing costs are as little as $300. For more information, call Springtree Group at (972) 395-8811 or use the online contact form.