Loans for Allstate Insurance Agents – A Few Things to Consider

Like many small business owners, Allstate Insurance Agents are regularly searching for working capital loans to help grow their insurance agencies. Banks are often hesitant to provide loans to Captive Allstate Agents without requiring some kind of physical asset (e.g. primary residence) to be used as collateral for the business loan. Why is this? From a lender’s prospective there’s certainly value in providing business loans to a profitable and growing Allstate Insurance Agency, yet even after a bank has gone through all the financial statements, tax returns and renewals they’re often still hesitant to approve the small business loan. They tend decide to pass on the loan not because of the agency’s cash flow but because of the lack of a physical assets they can use as collateral for the loan.

Unfortunately, banks seem to overlook the fact that an Allstate Insurance Agency is a cash flow business and the best way to grow an Allstate Agency is to generate more demand by increasing prospects. This often includes hiring and training additional sales staff, opening satellite offices, acquiring another Allstate Book of Business or launching a new marketing campaign. Growth initiatives such as this require spending working capital weeks, months or even years before an agency may see a return. In order to fund investments such as this, Allstate Insurance Agencies often turn to banks where, more often than not, they quickly get discouraged by the fact that the lender overlooks the fact that a Captive Allstate Agent’s Book of Business is one of the most valuable assets they own. More frustrating is the fact that the funds from the loan will be used to grow that very asset.

That said, Allstate Insurance Agency owners continue to struggle and face challenges when it comes to finding loans to expand and grow their small business. This article will discuss the lending options that Allstate Insurance Agency owners should consider when looking for funds to fuel their agency’s growth.

Things Allstate Insurance Agent’s Should Consider When Looking for An Allstate Insurance Agency Loan

Like any business owner, Allstate Insurance Agency owners are looking to increase profit as possible. In order to achieve this, working capital loans are always in high demand and required to keep up with the intense competition in the insurance industry. Affordable financing options are an essential part of an Allstate Agency’s growth and expansion which is why Allstate Insurance Agency owners should consider the following when looking for funds to grow an Allstate Insurance Agency:

Applying for an Allstate Insurance Agency Loans from Credit Unions or Banks:

Business loans from credit unions or banks can be an option but as we already discussed this often not efficient and unfortunately usually ends with the lender deciding to pass on the loan for one reason or another despite an Allstate Agency’s profitability and cash flow. Banks have to follow very specific criteria in order to approve a business loan and after spending weeks or months reviewing years of collecting and reviewing an Allstate Agency’s financial records the business loan does not match what the bank or credit union requires on paper in order to approve the loan especially with the increased regulations banks face when it comes to providing small business loans.

Relying on a Line of Credit to Fund an Allstate Insurance Agency:

A business line of credit extended to an Allstate Agency can be an excellent source of funding. The loan usually has a fixed interest rate and the Allstate Agent is able to pull money out as needed with various repayment terms. However, unless an Allstate Agent is willing to put their primary residence up as collateral for a loan, a business line of credit for an Allstate Agency can be difficult to secure with a lender based on cash flow alone.

Considering Alternative Lenders for Allstate Insurance Agency Loans:

There are various other lenders (Kabbage, OnDeck, Lendio, Fundable) that provide both business and personal loans as an alternative to banks and credit unions. Through television, online and social media marketing, entrepreneurs and small business owners are encouraged to apply for these types in hopes of receiving the capital the need to grow their business. However, if you read the fine print, many of these online lenders are not much more than payday lenders with unrealistic payment terms in hopes that you’ll return to refinance the loan again and again. For these reasons it’s often best to avoid these types of alternative lenders who are quick to provide loans to anyone that visits their website.

Alternatively, there are other lenders, such as McQue Capital, that focus specifically on providing small business loans specifically to Allstate Insurance Agencies. As opposed many online loan websites, a loan from an lender who works directly with Allstate  Lending Connection and focuses specifically on lending to Allstate Insurance Agents is often easier to qualify for and provides far better terms. This translates into increased cash flow for the borrower which can be reinvested into the Allstate Agency and fuel additional growth for the business.

Using Business Credit Cards to Fund an Allstate Insurance Agency:

While credit cards are a convenient option, it can quickly become a burden due to high-interest rates and minimum monthly payments. More often than not, an Allstate Insurance Agent quickly reaches their credit card limit which then forces them to turn to short-term lenders starting a cycle of refinancing the same loan again and again. Worse yet, is the fact that these credit cards are often personally guaranteed by the Allstate Agent which can wreak havoc on an Allstate Agents personal credit score making it difficult to apply for a home, vehicle or other personal loan in the future.

Best Option for an Allstate Insurance Agency Loan

If you’re a Captive Allstate Insurance Agent looking for lending options for your Allstate Insurance Agency you should definitely check out McQue Capital. Providing business loans to Allstate Insurance Agents is all we do. Unlike bank, credit unions other alternative lenders, McQue Capital understands the needs of an Allstate Agency, their cash flow and need for commission-based lending because Allstate Insurance Agents are the only borrowers we work with.

To learn more you can visit our website or email us as [email protected]. You can also give us a call anytime at 877-432-7030 or feel free to message us on Facebook or check us out on LinkedIn.