Applying for capital is the first step in getting the resources needed to advance the goals of your agency. At Providence Bank Agency Finance, we understand that time is of the essence; therefore we want to ensure that this process is as smooth as possible. Before funding can take place, there is preliminary information we will need from the agency and its owners. This information will help our team have a better understanding of your agency and its needs.
We highly recommend that you review your personal credit report prior to application. This not only gives you insight into your credit score, but also lets you see any items that may affect your score (i.e. credit cards, outstanding loans/debt). You may also identify negative items on your credit report that you may have been unaware of and potentially take corrective action where necessary. You can run a credit report using a free credit reporting website. Learn more about how you can order your free credit report.
Documents that will be essential for us in underwriting include:
- Last 3 years of your tax returns (both business and personal).
- Executed contracts with all of your insurance carriers, including compensation schedules. If you do not have the contracts and/or compensation schedules, you can request these documents from the respective carriers. You will need a copy with all the signatures.
- Financial statements for the current year (Balance sheet and Income Statement).
- Commission summaries or other management reports from your carriers or agency management system.
Also, take some time to gather organizational documents including Articles of Incorporation (C and S Corps) or Organization (LLC), Operating Agreement (LLC), and/or Bylaws (C and S Corps). These important documents are required for our underwriting and loan documentation.
Ensure all your insurance licenses are up to date. If your agency is incorporated, be sure to know if your agency is in good standing with the state, and if not, update your filings to ensure the agency is properly authorized to operate in your state. You can request this information at your state's Secretary of State website.
Make sure to check on any outstanding liens your agency may have. If you are not certain that your agency has liens, you can perform a UCC search on your state's website for any current UCC filings on you or your business. Owners are sometimes surprised to find liens on an agency that they didn't know existed, and those liens can take time to research and be released which can delay any new loan process.
Each of our loans requires a personal guaranty of each owner with greater than 20% ownership. Be prepared to complete a personal financial statement which helps us review an owner's financial profile. The personal financial statement will include:
- Annual/Monthly personal living expenses (rent, mortgage, debt, living)
- Assets, such as bank accounts, real estate property, retirement assets, your agency
- Liabilities, such as mortgage, credit cards, child support
- Life Insurance, tax liens or unpaid taxes
If there is more than one owner of your agency, please ensure that all owners are aware of your desire for capital, and they are included in these discussions. Growing your insurance agency is something all owners will need to be a part.
Taking the time to review the items above prior to applying for a loan can save precious time in the process.