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Insurance Premiums and Your Cashflow

Nathan Harding - Tuesday, April 18, 2017
The cost of protecting your business through various insurance policies is one of the largest expenses faced by business owners. If cashflow is critical in your business, you may be faced with the decision to keep your policies or not: the Cash or the Cover? ‘You’re damned if you do; and damned if you don’t’.

I’m not suggesting for one second you cancel the policies you have in place -- the risk associated with inappropriate coverage is far too high.

I can however recommend a more effective way to soften the impact on your cashflow: by spreading the premium throughout the year.

Insurance premiums take large sums out of your cashflow -- this can cause unnecessary stress, especially if they coincide with other bills, or at the low point in your trading cycle.

If you’ve felt this stress before, then I have a simple recommendation that may interest you: Insurance-Premium Funding.


What is Insurance-Premium Funding?
Insurance-Premium Funding (IPF) is a valuable strategy we suggest to our clients to keep cash in their business for longer.

With IPF, the lender pays your annual insurance premium on your behalf by the due

date, and allows you to spread the premium over monthly instalments.

Benefits of IPF
  • - Fixed monthly instalments – providing cashflow certainty.
  • - Ability to consolidate different insurance premiums on the one-finance contract, regardless of when the premiums fall due.
  • - Interest repayments may be tax-deductible.
  • - Free up your cashflow to use elsewhere in your business.
  • - Allows you to afford the most appropriate level of insurance to protect your business. 

Types of Premiums that can be funded:

Cancellable Policies -
  • - Business Cover;
  • - Business Interruption;
  • - Commercial Fleet;
  • - Commercial Motor Vehicle;
  • - Corporate Travel;
  • - Contract Works;
  • - Director and Officers;
  • - Electronic Equipment;
  • - Industrial Special Risks;
  • - Machinery Breakdown;
  • - Marine Vessel;
  • - Marine Cargo;
  • - Marine Transit;
  • - Public Liability;


Non-Cancellable Policies –
  • - Broker Fees;
  • - Commercial Motor Vehicle Registration Fees; 
  • - Keyman Insurance;
  • - Credit Insurance;
  • - Crop Insurance;
  • - Debtors Insurance;
  • - Hail Damage;
  • - Professional Indemnity Insurance;
  • - Workers Compensation/Work Cover;


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Presidio Finance Consulting is the holder of Australian Credit License (ACL) 391109. Presidio Financial Services Pty Ltd trading as WB Financial is an Authorised Representative of Financial Wisdom Pty Ltd, ABN 70 006 646 108, with Australian Financial Services License (AFSL) 231138.