Loans for Insurance Agents: 4 Options to Consider
Many conventional lenders are hesitant to make loans to insurance agents because they fail to see the hidden value in this type of borrower. They look at your financial records and assets, but fail to see the potential of your business. As an insurance agent, you are always on the lookout for ways to fund growth and expand your business, but you need options.
Most important, your business is growing. The industry has something others do not; an increasing base of prospects, a large consumer demand for insurance, social and economic inflation that increases premiums, and a half a century of uninterrupted recorded growth in premiums.
Typically an insurance agent seeks funding for some basic reasons:
- For an acquisition
- To fund the improvement in the business’ operations or facilities
- To address a need for cash flowBut, finding financing for your insurance business may be easier than you think. There are several business funding options available that can secure your business growth starting today.
Four Loan Options for Insurance Agents to Consider:
In today’s business environment, one of the best ways to keep your business relevant and profitable is to keep growth steady, offer better service and meet the changing demands of your clients. Think about all that is required for you to grow your business and choose a funding solution that fits your needs. Online loans for small businesses are an excellent tool to help you reach your goals and keep your business growing.
Banks and Credit Unions
Applying for a loan from a bank or credit union is an option, but don’t expect it to be easy, fast or that your loan will be instantly approved. According to bizfinance.com, your chances of securing that loan are not ideal. Before the recession of 2008, most thriving small businesses had an ongoing relationship with a bank that provided them with at least a line of credit. The financial crisis dried up those lines of credit and small loans became almost impossible to obtain.
You will need excellent credit, collateral, a strong, detailed business plan, financial documentation and lots of patience.
Lines of Credit
A Business Line of Credit is an option where a lender lets you borrow money up to a specified amount, almost like a credit card, only with better interest rates. With this method of funding you only use exactly what you need and your interest is based upon that amount, not the full line of credit available to you.
This type of funding is typically unsecured by any collateral and does not offer long repayment time-frames. Still, they are difficult to obtain from a traditional bank unless you have excellent credit.
Alternative lenders have several loan products that may fit your working capital needs. The application focuses on the overall health of your business, and sees your potential. It is a good fit for the small business driven by an entrepreneurial mindset because it allows business owners, regardless of their credit score, to fund an opportunity for growth and do it quickly. With alternative business funding, what used to take several weeks or a couple of months can now be done online in about a couple of days.
Alternative lenders offer ideal choices if your business is doing well, but perhaps has gone through a series of ups and downs, and therefore, you have concerns about the loan process at a bank. The solutions fit if you are ready to move forward, but need cash quickly or if your business is fairly new, so you lack an extensive credit history to show the bank.
Business Credit Cards
According to entrepreneur.com, credit cards are used by some business owners to fund expansion, but they typically hit the borrower with a much higher interest rate than most other funding solutions. Though they are an easy option to access and use, you will be paying more over time because of the interest.
When it comes to loans for insurance agents, there are lending options available that address the unique needs of this business. For more information about creative options for your working capital needs contact Credibly today!