Organizations strive to improve cash flow and maintain liquidity through the proper use of working capital. In support of this, we at MFLC and in partnership with Allied Insurance Company Ltd, Ceylinco Insurance Company and Sri Lanka Insurance Company Ltd introduced insurance premium financing where your firm could make better use of its funds by deferring the payments on your insurance premiums over the period of the policy; rather than paying such premiums up front. This compelling reason to consider insurance premium finance for your company is unmatched in todayâ€™s tight liquidity environment.
MFLC advances the premium to the insurance company on behalf of your organization, and through a maximum of ten monthly installments (including the down payment) you pay back MFLC. Furthermore the unearned premium of the insurance policy being financed serves as security for the IPF facility and generally there is no other form of collateral.However, even a single month default will make the insurance policy and cover liable to cancellation by the insurance company.
Key Benefits of IPF
- Preserving working capital to improve cash flow and maintain liquidity, particularly when the rate of return is higher than the borrowing rate on IPF.
- IPF would be an additional source of funding, and has no impact on the existing credit facilities of your organization.
- A tax deductible interest expense (In a tax environment)
- Availability of flexible payment installments in line with seasonal business cash flows
Frequently Asked Questions
What Insurance Premiums are financed under IPF?
Any annual insurance policy; which includes insurance premiums on buildings, resorts, vessels, group health insurance etcâ€¦
What is the process of obtaining an IPF facility?
MFLC would provide an Insurance Premium Quotation for you based on the policy quotation provided by Insurance Company for your consideration. Once you decide to proceed; MFLC would enter in to an Insurance Premium Agreement with your organization at which point you would be required to pay the down payment, and subsequently MFLC would pay Insurance Company the premium on your behalf.
Are there any collateral required when applying for IPF?
Insurance premium financing is a secured form of lending (unearned premium of the policy), therefore, in most circumstances there would be no additional collateral required. However, there might be certain instances where personal guarantees would be required based on certain credit guidelines followed by MFLC.
What do I need to obtain an IPF facility?
IPF has been designed for quick turn around times where clients could obtain the facility fast and with less hassle. Therefore, MFLC would require the insurance cover proposal from Insurance Company, completed application form and a copy of the NIC of applicant, and in some instances (depending on the finance amount) the latest financial statement and any other document that may be applicable.