Raise cash without selling your soul

Nigel Payne is managing director of Assurant Intermediary

We all know that cash is king right now - not only to pay the bills but also to exploit market opportunities such as acquisitions, new ventures and organic expansion. The key question is how can you raise the cash?

There are the obvious routes of getting it from your own cash flow or raising it from a bank but not everyone has a bank that welcomes them with open arms or viable interest rates.

So what else can you do? One way could be to realise some of the income streams in your business and use them to raise a significant amount of capital. This may feel as though you are selling some of the family silver but if other routes are not open to you then it does give you another option.

One example of this is to sell some or all of your general insurance renewal income. At Assurant Intermediary we have completed over 30 of these deals for brokers in the last 12 months ranging from a few thousand pounds to six figure amounts. The key is that it is a quick way of raising cash. However it is a one shot opportunity that you must be sure is the right thing to do for your business.

If this does sound like a route you may want to take then speak to your GI provider as each is likely to have different rules and criteria for such a purchase. However there are certain common factors they would want to consider such as the amount of your monthly renewal income, your renewal rates for the last 12 months and how long those policies have been on the book. From this they can calculate the value of that book and make you an offer.

One pitfall to be aware of however - some providers will want to withhold a percentage of the offer they make for 12 months. Quite honestly this is one tactic I don’t think you should agree to. The provider knows the performance of your book therefore in my opinion the offer should be unconditional.

Talk to your GI provider if your need cash and this sounds like a route for you.