A convenience service RSInc. provides for their clients is arranging premium finance loans for commercial insurance coverage as an alternative and flexible way to pay for insurance. A typical loan consists of a down payment usually 15 to 30 percent of the policy premium and subsequent payments that fully amortize the loan, in most cases over a period of 9 months. Frequently Asked Questions Why Finance Insurance? Hundreds of thousands of companies currently finance their property and casualty insurance premiums. Why? Because financing Insurance increases cash flow, acts as additional line of credit, and may improve financial ratios if the premium finance obligation is not reported as a liability. Premium Financing unlocks the true potential of your insurance asset.  Can I pay off my loan earlier than the final due date? Yes - most premium finance companies imposes a small fee or even no penalty for prepayments. How does premium financing compare with bank financing? Premium finance doesn't disturb existing credit arrangements. No collateral other that the down payment is required to obtain financing. The rates are comparable to rates in the short term market and you'll find they are extremely competitive. The higher the premium that is financed the lower the cost of funds. Is the interest on my loan tax deductible? Yes in most cases but you should consult with your accountant for full details. Why would I want to finance my insurance? Your insurance is an asset. Financing your insurance leverages the underlying value of that asset and pays for it as it is used. Premium finance improves cash flow and preserves your company's working capital. Why do your rates change? Like bank rates, Premium finance rates are tied to financial market fluctuations, up and down. Are the rates always fixed? Most clients prefer to lock in fixed rates but some premium finance companies offer both fixed and variable rates depending upon your preference. How does premium financing work? It's Simple  RSInc arranges the terms of the premium finance transaction, completes the contract on your behalf and provides a copy for your records. The Premium finance company then pays your insurance premium in full and bills you for installment payments. The interest is calculated from the effective date of the policy which is the date your company receives coverage.