This financial arrangement involves taking out a loan to cover insurance premiums, allowing businesses to maintain their cash flow while securing necessary coverage.
The problem
Many of these premiums are paid annually and they may even land on your desk at the same time of the year, placing strain on your cash flow, especially if it’s cyclical or seasonal.
Premium funding is a useful tool for managing your different annual insurance premiums and thus your cash flow. But it does have pros and cons so careful consideration is needed to assess if its right for your business.
A solution to rising insurance costs
Premium funding can be a solution to this problem. Also known as premium financing, it allows you to pay your annual insurance in manageable monthly instalments, rather than as a lump sum, freeing up money in your business for other expenses or to buy inventory.
It works like this.
Kesahv pays the full annual premium of your policy on your behalf to the insurer. Then you repay the funding company in monthly payments