With insurance premium renewals around the corner, it is important to understand the options available to your business. Many major insurance companies offer monthly payment plans for personal insurances, whether it is for your car or home, and even life insurance. However, when it comes to protecting your business with the various required insurances it can be quite difficult to manage cashflows with large lump-sum payments often coming due all at once.

So what options are available to businesses by way of Insurance Premium Funding (IPF)? And how does it work?

What is Insurance Premium Funding (IPF)?

Insurance Premium Funding (IPF) is specialised funding through major bank lenders for business insurance expenses. IPF allows your business to take what would usually be a lump sum payment for annual insurance premiums and spread them over monthly payments across the financial year.

The application process for IPF is generally quite fast and Balanz can help get it done in 2-3 days from start to finish for most small to medium businesses (slightly longer for larger businesses).

Why consider IPF?

There are many benefits to be realised by your business using IPF.

Arguably the most important value-add is the ability to smooth your cash flow and keep vital working capital within your business. Particularly in the current economic environment, being able to maintain sufficient working capital is vital for almost all businesses and means cash can be redirected to income-generating investments instead.

Also, crucially, did you know that financiers generally do not consider IPF to be “debt” per se. This means that having IPF within your business will typically not impact upon servicing and security for other debt facilities, either existing or proposed.

What about WorkCover?

While Balanz can assist with all types of insurance premiums, the mandatory WorkCover premium is the most common type we help our clients with.

With premiums due end September, Worksafe Queensland offers an early bird discount* for full payment by mid September, or offers a payment plan for the full premium spread over the year, interest-free. But have you considered the best of both worlds?  

Through IPF you can take advantage of the early bird discount while also managing your cash flow. Typically financiers will directly pay the insurer upfront, then will charge you monthly instalments at a sharp interest rate – the prevailing repayment using IPF is often less than the WorkCover payment plan, which means it is certainly worth considering for your business.

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So, as outlined, IPF is a smart solution for businesses to avoid the large lump-sum insurance expenses hitting at once, and the subsequent knock-on effects for businesses.  What is best for you and your business?  Our Balanz team can demonstrate all available options and work with you to find your best solution. And with WorkCover premium due date fast approaching, now is a great time to find out more….  

Contact our Balanz team today about IPF, we’re here to help.

*Reference: https://www.worksafe.qld.gov.au/claims-and-insurance/workcover-insurance/paying-my-premium