In a PII (Professional Indemnity Insurance) market worth £3.3 billion*, Premium Credit is giving credit brokers’ customers the opportunity to spread the cost of renewing their cover over convenient monthly instalments rather than having to pay in one, annual lump sum. Karl Leitelmayer, Sales Director – Tax, Premium Credit Specialist Lending outlines the opportunity.
Premium Credit’s award-winning credit facility, offered through our broker partners, provides a useful payment option for solicitors and professions including accountants and financial advisors. Together they make up between 75% and 80% of the PII market*.
As renewal deadlines for PII cover approaches for many law firms, working with Premium Credit is a strong option.
Background to the current situation
With operational costs hitting hard after several years of record-breaking inflation, law firms of all sizes are inevitably experiencing increased financial pressure and seeking new methods to maintain cash flow.
PII can represent a significant expense for law firms, at times surpassing other business expenditures such as facilities or rent. Premium Credit offers an alternative payment solution for PII coverage that aims to provide solicitors with a range of benefits.
Spreading the cost of cover
Legal practises benefit from:
Cash Flow Management
- Paying for PII in instalments helps firms manage their cash flow more effectively. Rather than making a substantial, annual lump-sum payment, spreading the cost over several months ensures that firms’ funds are not depleted at once.
Budgeting and Financial Planning
- Instalment payments make it easier for firms to budget and plan their finances throughout the year. Predictable monthly or quarterly payments allow them to allocate resources more efficiently and avoid financial strain during periods when large annual expenses are due.
Operational Flexibility
- By reducing the immediate financial burden of a large upfront payment, legal firms can maintain greater operational flexibility. They can invest available funds in other critical areas such as marketing, technology upgrades, staff training, or other operational improvements.
Access to Higher Coverage
- Paying in instalments can make higher levels of PII coverage more accessible. Legal firms might opt for higher limits of liability or additional coverage options when the cost is spread out, thus enhancing their risk management strategies without straining their finances.
Improved Financial Health
- Maintaining a healthy balance of cash reserves is crucial for any business. Instalment payments help legal firms keep more cash on hand, which can be vital in meeting unforeseen expenses, emergencies, or opportunities that require immediate funding.
Mitigation of Financial Risk
- Spreading out payments can mitigate financial risks associated with potential downturns in business. If a firm faces a temporary drop in revenue, having smaller, manageable payments rather than a large annual premium can be less financially disruptive.
Client Payment Alignment
- Legal firms often receive payments from clients on a monthly or quarterly basis. Aligning PII payments with this income structure can create a more harmonious financial cycle, ensuring that outgoing insurance payments match incoming client payments.
As outlined, paying for PII in instalments offers legal firms numerous positives, but how do credit brokers benefit?
Opportunities for credit brokers
As the deadline for PII cover renewals approaches for many, Premium Credit continues to provide its popular payment option for brokers to offer their customers with attractive levels of commission available.
Key features at a glance:
- We finance PII (& tax bills) from £10k to £15m deal values (few funders can accommodate business of this size)
- Monthly repayment option for clients of 6, 10, 12, 15 & 18 months
- We pay the insurer directly
- No Personal Guarantees needed up to £150k and can be waived over this figure
- Funding is always unsecured
- Simple processes
- A revolving credit agreement ensures smoother renewals, creating a recurring revenue model for brokers
- Nationwide coverage
- Competitive pricing
- Up to 9% commission for brokers
Act now
Despite difficult trading conditions for many law firms, Premium Credit provides a practical way for Credit Broker customers to spread the cost of their PII and tax bills whilst providing an additional income stream for brokers.
To find out more, please reach out to myself or Richard Crossland, Premium Credit’s Head of Credit Broker Tax, or one of our dedicated Account Managers on 0207 191 2079 or via tax@pcl.co.uk
https://www.premiumcredit.com/products/tax-and-vat
Source*: Money.co.uk
