Australian businesses are currently facing many challenges, including rising inflation and interest rates, higher fuel costs, labour shortages and supply chain disruptions.
Adding to the pressure, many measures that were put in place by the Australian Government during the COVID-19 pandemic to assist businesses are being phased out and the Australian Tax Office’s two-year freeze on penalty notices for unpaid taxes has come to an end.
As reported in the August 2022 CreditorWatch Business Risk Index, many SME businesses are currently unable to pay their bills, with trade payment defaults surging, up 53% year on year. This is a key indicator that cash flow is an issue and with the economic pressures unlikely to subside soon, it is vital that businesses optimise their necessary expenses to be able to continue to operate and invest in their future.
A comprehensive insurance program provides critical protection against the risks of doing business, but can come at a huge lump sum expense and can make a solid negative impact on cash flow reserves. By utilising a premium funding solution to break down the lump sum expense into more manageable monthly repayments, a business can benefit from improved cash flow and financial flexibility.
Additional benefits of a premium funding solution for a business include:
- Reduces the risk of underinsurance by providing access to the right level of cover that can sometimes seem out of reach due to affordability.
- It’s a simple fixed rate loan that means clients are protected from interest rate fluctuations over the course of a premium funding contract.
- Interest repayments may be tax deductible.
- A premium funding solution will not impact any finance or banking facilities they may already have in place due to the insurance policies acting as security for the loan.
We encourage our brokers to discuss an Arteva premium funding solution with all of their clients so that they can benefit from the assistance it can offer.