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Business Insurance Premium Funding in Australia

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*The Interest Rate is calculated on a Secured Loan for business use, effective 03/02/2023 and subject to change. WARNING: The interest rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different interest rate.

Insurance Premium Funding

While many consumer insurance products include the option of paying premiums in monthly instalments, an instalment payment plan is not usually available on insurance policies. Some commercial insurances attract significantly large premiums which are payable annually. When the due date arrives, making the payment can place considerable pressure on the cash flow. But defaulting on the premium payment or late payment may put the business at risk of not being covered by the insurance policy.

For this purpose, Insurance Premium Funding, referred to in financial services as IPF, is available. This is a specialist lending facility which is offered by a specialist group of lenders and enables businesses continuity of insurance coverage while paying the premium in instalments.

IPF Explainer

  • A loan arrangement is established between the business and the lender, often negotiated by a business loan broker.
  • Negotiations will include establishing the interest rate, the term of the loan – one-off or ongoing, the number of instalments, and the fee structure.
  • The business lender extends the total amount of the premium to the business to pay by the due date.
  • The business then repays the lender on pre-arranged terms.
  • Terms may be the premium paid in monthly, quarterly or 6-monthly instalments to the lender.
  • Interest is charged accordingly at the rate negotiated.
  • The lender charges a fee for service and other charges may apply. These will vary from lender to lender.
  • IPF can be set-up for each premium on an annual basis or on an ongoing, renewable loan arrangement.
  • Premiums from $5,000 to over $1 million can be eligible for IPF.

Insurances Which Can Be Funded

Businesses in different industry sectors will face a range of large insurance premiums, which may include:-

  • Carrier liability in the transport sector.
  • Large vehicle fleet insurance policies.
  • Professional indemnity policies.
  • Public liability in high-risk industries.

Sourcing IPF

If your business is under pressure to meet annual insurance premiums, then IPF could be a workable solution for you. We have contacts with private loans and non-bank business lenders that operate in this sector and with business finance brokers that can negotiate a solution for you.

Connect with us for contacts in regard to Insurance Premium Funding.

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