All banks think in terms of collateral when making loans to commercial entities. Collateral is usually classified as a tangible asset such as property or marketable securities. These are things that can be seen, felt and measured on balance sheets.
Having a tangible asset to pledge against a purchase is optimal, but not mandatory in today's market. We look at RENEWAL INCOME as a reliable asset. Most agent/brokers with direct carrier appointments will see between 88-92% of their policies renew. Also, agent/brokers are usually growing their books of business between 10-20 % annually. When underwritten correctly, renewals can be as strong an asset as property.
Our sources lend money secured against renewal income for agency purchases, acquisitions, perpetuation and consolidation. Loans can be underwritten and funded in as little as 10 business days. We help condense 30 year aspirations into less than 30 days. Please call or e-mail us to answer any questions.
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