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Why Insurance Brokers Should Introduce Business Finance Solutions

July 14th, 2022

Business finance solutions are a natural fit for insurance brokers to offer clients. They can complement insurance products as they help to manage business financial risks in ways that insurance doesn’t cover. Insurance brokers who offer business finance solutions can therefore offer their clients a more comprehensive risk management solution.  

Adding business finance solutions to the risk management mix opens up benefits for both clients and insurance brokers.

The benefits for clients

Business finance solutions can provide your clients with a range of benefits, including helping them:

  • Manage risks that aren’t covered by standard insurance products, such as cash flow risk, supply chain risk and foreign exchange risk 
    • Cash flow risk can be minimised by Invoice Financing, which enables a business to turn its unpaid invoices into instant cash. 
    • Supply chain risk can be minimised by Trade Finance which helps businesses to pay suppliers to get the stock they need to generate revenue. 
    • Foreign exchange risk can be managed via a range of financial product solutions to reduce the risk of currency fluctuations.
  • Get ahead and grow. For example, Invoice Financing can provide a business with access to an increasing amount of funds as the value of its outstanding invoices grows. This growing line of credit can then give the business the funds it needs to expand and capitalise on new opportunities before its competitors do.
  • Pay their insurance premiums. A business finance solution like Invoice Financing can be considered a premium funding solution. It can help to ensure that clients will always have the cash flow to pay for the level of business insurance cover that they need. 

The benefits for brokers

Business finance solutions also provide brokers with a range of benefits, including:

  • The ability to earn upfront referral commissions.
  • The ability to earn passive income via trailing commissions over the life of the solution. For example, Invoice Financing solutions are a line of credit that can stay in place and keep growing as the value of a business’s outstanding invoices grows. This line of credit can then enable a business to expand and capitalise on new opportunities.
  • The ability to be perceived by clients as a ‘one-stop’ risk management solution shop. At Earlypay, we are a business finance solutions provider who works collaboratively with business insurance brokers.
  • The ability to develop long-term clients with strong, growing businesses. The insurance needs of these types of clients will inevitably grow over time. 
  • Providing a premium funding solution. This can reduce the amount of lapsed policies (and lost commissions) for a broker, as well as the amount of time spent chasing overdue premiums. Instead, the broker can focus on servicing the growing needs of their strong client list, as well as sourcing new potential clients. Retaining as many of your existing clients as efficiently as possible is important. 

Business finance solutions to manage risk create win/win scenarios for both insurance brokers and their clients. To learn more about how you can help your clients’ businesses (and your own business!) grow, please feel free to book a one-on-one consultation.

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