Demand for premium finance to help pay for business insurance should remain high
New research from the UK’s leading premium finance company, Premium Credit, reveals that over the next 12 months, 36% of SMEs expect to see their income grow, compared to just one in four (24%) who anticipate it will fall. Some 12% of businesses expect to see double digit growth in their revenue.
The main reason for optimism about growth is a general recovery from the Covid-19 crisis – the view of 61% of those businesses who expect to see their income increase. This is followed by 33% who say it is because they are launching new products and services, and 31% who say it’s down to cutting costs, and 29% who say it’s because they are entering new markets.
For those businesses expecting a fall in revenue, 39% say it’s because they are still suffering from the effects of the Covid-19 crisis, and 31% say its due to their client base shrinking. Some 29% say it’s because they are struggling to source suppliers, and 23% put it down to being unable to fill their job vacancies.
Owen Thomas, chief sales officer at Premium Credit said: “It is good to see that overall business confidence is increasing. However, SMEs still face many challenges and even though average revenues are expected to increase, only 21% of businesses anticipate their cash flow will increase over the next 12 months as they look to invest in their operations. One in four (24%) say their cash flow will shrink.
“Premium finance is a very cost-effective way for businesses to buy insurance, and better manage their finances and cashflow through spreading payments. Demand for premium finance amongst SMEs could remain high because our Insurance Index, which monitors insurance buying and how it is financed, reveals that 59% of SMEs are relying on credit to pay for their insurance, borrowing on average around £1,832. Some 16% of SMEs claim to be using over £3,000 of credit a year to buy their cover.”