In the private insurance mergers and acquisition market, some sellers elect not to work with an advisor. This decision, made at a crucial moment in the financial trajectory of the seller, is almost guaranteed to leave them comparatively poorer….
As the saying goes, “Timing is everything.” That definitely holds true when it comes to making any significant decisions or transitions in your life, including large purchases, job changes and moving to a new area. For those of you who are thinking about entrepreneurship via purchasing an insurance agency, naturally you must give many factors some serious consideration.
One thing is certain: you’ve picked a great time to make such a decision. Over the next decade, approximately 75% of all insurance agencies will transition ownership. The main cause for such a high turnover rate is that the current average age of agency owners in the United States is 59. Because of this, we will see more and more insurance agencies for sale as their owners look toward their retirement.
Most agency owners may make their way into retirement through insurance agency mergers, perpetuation, book sales, buyouts and sale of their agency. This is fantastic news for younger agents who are now looking toward their own future. With the right experience and business knowledge, you could own your own insurance agency in the very near future.
Although you may find a number of opportunities to buy a privately owned insurance agency over the next few years, that doesn’t mean that the process itself is without any challenges. In particular, financing your purchase may present a considerable hurdle.
In general, insurance agencies don’t have many hard assets that they can borrow against. In turn, this means that traditional banks do not like to grant loans to agents looking to purchase their own agency. The risk is higher than the potential return on investment for most banks.
Luckily, there are options available to you if you are one of those agents who would like to take advantage of the high agency turnover rate currently taking place. One such option is to work directly with a company that specializes in helping entrepreneurs get started.
Springtree Group presents you with a solid list of lenders who have experience working with and lending to clients looking to purchase an insurance agency. We also offer a full spectrum of services to agency sellers, so that the transfer of their agency can be kept confidential.
Confidentiality is extremely important in the insurance agency industry. It is crucial that customers, employees and competitors aren’t made aware of an agency sale, so that everything remains status quo. Springtree Group’s lenders also give agency sellers a guarantee that their potential buyer is financially qualified and able to obtain the proper loan in order to make the purchase. This ensures that the transfer of the insurance agency does not drag on interminably, which may ultimately lead to the undesirable loss of confidentiality.
Now is the ideal time to check out insurance agencies for sale in your desired geographic area and make your move from insurance agent to agency owner. You can rest assured that insurance agency financing can be secured when you work with a business broker like Springtree Group, with powerful lending connections in the insurance industry.
The blog links here below represent a small sampling of the numerous listings for Texas-based insurance agencies currently available as well as some helpful information regarding buying and selling agencies. For more information, please contact Springtree Group at 972.395.8811. We look forward to working with you.