Spread an annual premium across the year
Turn one annual insurance premium into manageable monthly payments.
Premium funding keeps cover in place without a lump-sum hit to working capital. Your broker explains the flat rate, the true annual cost and the cancellation terms.
What is a insurance premium funding?
Insurance premium funding is a short-term loan that pays your annual business insurance premium in full to the insurer, which you then repay in monthly instalments across the policy period. The policy itself acts as security, so no property or director’s guarantee is usually required.
Annual premiums for public liability, professional indemnity, plant and equipment, motor fleet and business interruption cover often land as a single invoice at renewal, sometimes $20,000 or more for a mid-sized contractor. Premium funding pays that invoice on day one and converts it into eight to twelve monthly instalments, keeping working capital available for the things that actually generate revenue.
The security arrangement is what makes this product unusual. The funder’s recourse is the unearned portion of the premium: if instalments stop, the policy can be cancelled and the refund from the insurer offsets the balance. That is why approvals are quick, credit assessment is light, and directors’ guarantees are often waived — but it also means a missed payment can put your cover at risk, which for a business with contractual insurance obligations is a serious consequence.
Pricing is usually quoted as a flat rate on the premium, typically 3–8% for the year. Because you are repaying steadily rather than holding the full amount, the effective annualised cost is close to double the flat figure. Your broker converts the quote into an annualised number so you can compare it fairly against an overdraft or paying the premium outright.
Insurance premium funding at a glance
| Amount | $5,000 – $1,000,000 |
|---|---|
| Term | 8–12 months |
| Rate type | Fixed |
| Indicative rates (Q3 2026) | 7% – 16% p.a. · see rate history |
| Security | Unsecured (guarantee may apply) |
| Repayments | Monthly instalments across the policy period |
| Typical speed | Same day to 48 hours |
| Best for | Businesses with large annual premiums that prefer to keep cash working elsewhere |
| Consider something else if | Small premiums the business can comfortably pay outright, where fees outweigh the benefit |
| Tax | Both the premium and the funding charges on business insurance are generally deductible. Confirm with your accountant. |
Advantages
- Preserves working capital at renewal time
- No property security or director’s guarantee in most cases
- Fast approval — often same day
Trade-offs
- Flat rates understate the true annualised cost
- Missing instalments can lead to policy cancellation
- Only funds the premium, not other business costs
How to apply for a insurance premium funding
- 01
Provide the renewal
Your insurance invoice or renewal schedule showing the insurer, policy type and premium amount.
- 02
Compare the true cost
Your broker converts flat rates into annualised figures across funders and shows the monthly instalment.
- 03
Fund and pay
The funder settles with the insurer, cover stays continuous, and instalments begin the following month.
Documents lenders commonly ask for
- Insurance renewal notice or invoice
- ID and ABN
- Bank account details for direct debit
Lenders we compare for this
Moneytech, Finstro, Westpac, Shift and others on our panel. See the full panel.
Estimate your repayments
- Number of repayments
- 12
- Total interest (est.)
- $4,543
- Total repaid (est.)
- $79,543
This calculator provides an estimate only and does not account for fees, charges or the specific terms a lender may offer. It is not financial advice or an offer of finance.
Key terms
What is insurance premium funding?
Insurance premium funding is a short-term facility where a funder pays your annual insurance premium directly to the insurer or broker, and you repay the funder in monthly instalments over the policy term, usually eight to twelve months.
Do you need security for premium funding?
No separate security is normally required. The funder relies on the unearned premium — the refund the insurer would pay if the policy were cancelled — which is why approvals are fast and personal guarantees are often not required.
How is premium funding priced?
Funders quote a flat rate on the premium, commonly 3–8% across the policy year, sometimes with a small establishment fee. Because the balance reduces monthly, the equivalent annualised interest rate is roughly double the quoted flat rate.