One of the nation’s largest premium finance companies has combined forces with an innovative Australian bank to offer a product that assists insurance brokers grow their business.
Premium Funding and St George Bank have teamed up to create a product called Acquisition Finance, which caters for broking businesses looking to grow through acquisition.
Premium Funding Director Ross Hayward says the product will allow brokers to obtain greater borrowing capacity coupled with lower repayments.
“Basically, it’s a way of leveraging off your business value to acquire other businesses,” Hayward says.
He adds that instead of requiring bricks and mortar as security, the product allows brokers to harness the future cash flows of their business.
“There are some other products out there, but they’re with just the one financier,” Hayward says.
“With this product St George and Premium Funding will both be tipping in money and therefore there’s a bigger capacity. So borrowers and brokers can borrow more.”
Hayward says the product provided a good opportunity for businesses that were struggling to grow organically.
“Which is quite difficult at the moment in the current climate. So another good strategy is growth by acquisition. It’s another string in their bow,” he says.
Hayward says he’s already received terrific uptake of the product, which has been operating on a low-key basis for about one month.
“We’ve had a hell of a lot of inquiries. There’s a huge demand for this type of product at the moment, especially given the consolidation that’s going on in the industry,” he says.
Hayward says St George’s open mindset and innovative approach were key to developing the product.
“It’s been something that we’ve been working with other banks for a long time, but none of them have been able to get their head around it,” Hayward says.
“And St George has always had involvement in the insurance industry, and already had a similar product. So the partnership is something that has worked out well.”