Business Loan Referral Program for Insurance Agents

Four Moments Your Clients Need Capital

• Renewal. A large annual premium or down payment lands in the same month as payroll and rent. The client considers cutting coverage to make the numbers work.
• A workers’ compensation or general liability audit. Payroll or sales came in higher than estimated, and the audit bill is due soon after it arrives.
• A claim in progress. The loss is covered, but the deductible is due now and the settlement is weeks away. Repairs and payroll cannot wait.
• A coverage requirement on a new contract. A customer or landlord requires higher limits before the work starts, and the business also has to fund labor and materials up front.

In each case the client’s problem is timing, not viability. Short-term working capital bridges it, and the client keeps the coverage you placed.

These are not rare events. In the Federal Reserve Banks’ latest Small Business Credit Survey, six in ten small employer firms applied for financing in the prior 12 months, and meeting operating expenses was the most common reason. The same survey found that fewer than half of applicants received the full amount they sought. Your clients are already looking for capital.

Why this helps your retention. Lapses and reduced limits are often cash problems. When a client can fund a premium, a deductible or an audit balance without draining the operating account, the policy stays in force and the account stays on your book.

You also become the person the owner calls first about money questions. That is a stronger position than being called once a year at renewal. The referral commission is a second line of income from the same book, but the main value is a client whose business stays insured and open.

How the Referral Works, Step by Step

You make the introduction. One dedicated specialist does the rest. Here is the path from first conversation to payout.

RAN Funding is a broker, not a lender. There are no quotas, minimums or exclusivity. Send one client a year or one a week.

What a Good Referral Looks Like

This is business financing only, for established companies. Best-fit clients have:

• 1+ year in business. Startups are not a fit.
• $20,000+ in average monthly revenue.
• A business bank account with active deposits. Personal accounts do not count.
• The 3 most recent business bank statements (4 in NY, CA or VA), ready to send.
• A need for $10,000 to $500,000+ in working capital. Some products go up to $2 million, and SBA loans up to $5 million.
• A clear use for the money. A premium, a deductible, an audit balance, payroll, inventory, equipment or a contract.

You already know most of this from the application you took at binding. Years in business and gross sales are on the file.

Contractors, restaurants, medical practices, auto repair shops, manufacturers and retailers are all common. See the full business loan requirements for more detail. Meeting these points is not a guarantee of an offer. Not every application is approved.

Who This Program Does Not Fit

Sending the wrong client costs you credibility. Hold back the introduction when:

• The business is new. Under one year in business is not a fit, and neither is someone still planning to open.
• The need is personal. This is business financing only. Personal loans are out.
• Revenue is well under $20,000 a month.
• The owner did not ask. A referral works when the client raises a cash problem, not as a pitch on every renewal call.

The program also does not fit every agent. If your book is mostly personal lines, you will rarely have a client who qualifies. If your agency or carrier contract bars outside referral income, the answer is no until that changes.

Matching the Moment to a Product

You do not choose the product. The specialist does that with the owner. It still helps to know what usually fits.

SBA loans are the slow option. The U.S. Small Business Administration sets the maximum 7(a) loan at $5 million and says borrowers apply through a lender, not through the agency. That path suits a client who can wait.

Working capital is also different from premium financing, which pays for one policy.

What Happens After the Introduction

The specialist calls the owner within one business day. The first call is short: what the business does, what the money is for and how much is needed. The owner then completes a short application and sends the bank statements.

When offers come back, the specialist explains each one to the owner, term by term. The owner decides.

You get updates at each stage, from application to funding. You are not asked to collect documents or chase signatures. If you want to be on the calls, say so and we schedule around you.

RAN Funding contacts your client only about the funding they asked for. There is no cross-selling and no marketing list, and we do not sell insurance.

How Commission and Payment Timing Work

RAN Funding is paid a commission by the lender when a deal funds. Your referral commission is a share of that. Three points matter:

• It is set in writing. The split is spelled out in the partner agreement before you send your first client.
• It is paid at funding. When the lender funds the deal and RAN receives its commission, your share is paid on the schedule in the agreement, typically by ACH.
• Renewals can pay too. If a client you referred takes more funding later, that is covered by the agreement as well.

Across the industry, referral pay usually takes one of a few shapes: a share of the funding company’s commission, a flat fee per funded deal, or tiers that change with volume. We do not publish figures here. How business loan referral fees work covers the structures in more detail.

If a deal does not fund, no commission is paid. Nothing here is a promise of income. Some clients you introduce will not be approved, and some will turn an offer down.

Three Ways to Respond to a Cash-Tight Client

When an owner says the premium is too much this month, you have three realistic answers.

None of these is always right. A one-time squeeze on a single premium may be best served by premium financing. A premium, an audit and a slow receivable in the same month is a wider problem, and that is when a referral helps.

Rules to Check Before You Refer

No license is required for a basic referral introduction through RAN Funding’s program. Your own professional rules still apply, and they vary by state, agency and carrier. Check these before the first referral.

• Your state’s inducement rules. The NAIC’s model Unfair Trade Practices Act treats giving any valuable consideration or inducement not specified in the policy, as an inducement to buy insurance, as an unfair trade practice. States adopt their own versions. The safe line is simple: never tie a funding referral to the purchase or renewal of a policy.
• How you describe yourself. The same model act lists it as an unfair practice for a producer to present as a financial planner or consultant when the producer is in fact engaged only in selling policies. Stay an insurance agent who knows a funding broker.
• Your agency and carrier agreements. Some limit outside business activities or require you to disclose them.
• Your errors and omissions coverage. Ask whether outside referral activity is addressed.
• Disclosure to the client. Tell the client in writing that you may be paid a referral commission.
• Client information. Share only a name and phone number, and only with the client’s permission. Do not forward applications, loss runs or payroll records.

You are making an introduction. You are not advising the client to borrow, and you must not describe yourself as a lender or as part of RAN Funding. If you are unsure, ask your state insurance department or your agency’s compliance contact first.

Four Illustrative Scenarios

These are examples to show how a referral plays out. They are not descriptions of specific clients.

• The roofing contractor. Picture a roofer in Orlando, eight years in business, whose workers’ compensation audit shows payroll well above the estimate. The agent makes the introduction, the owner sends three bank statements that afternoon, and working capital covers the balance. The policy stays in force.
• The restaurant. A restaurant in Houston has a covered kitchen fire. The deductible and the first repair invoices are due before the claim pays. The owner asks the agent what to do, and the agent makes one introduction.
• The machine shop. A manufacturer in Cleveland wins a contract that requires higher liability limits. The added premium arrives with a materials order. The owner uses funding for both and starts the job on time.
• The new bakery. A bakery in Phoenix opened four months ago and cannot cover its renewal. This is not a fit. The business is under one year old, and the agent says so.

In the first three, the owner raised the problem and the agent only made an introduction.

Common Mistakes Agents Make

• Bundling the two conversations. Funding offered as a reason to renew is the mistake most likely to cause a regulatory problem.
• Skipping the heads-up. A client who is not expecting the call often does not answer it.
• Describing terms. You do not know what the lenders will offer. Leave amounts, costs and timing to the specialist.
• Promising an outcome. Say “they will review it,” not “they will fund it.”

Other advisers face the same issues. See how the program works for accountants and CPAs and for payment processing reps, or compare an affiliate program with a referral program.

How to Start

1. Check your own rules. Read your agency and carrier agreements and your state’s inducement rules.
2. Sign up. The form on the referral partner page takes about two minutes. We call within one business day.
3. Read the partner agreement. It sets your commission and how you are paid.
4. Pick two or three clients. Start with commercial accounts that have mentioned cash pressure. Contractors with audit balances are a common first referral.
5. Make the introduction. Name, phone number and a heads-up to the client.

After the agreement is signed you receive marketing materials and a co-branded landing page. You get one RAN Funding contact and one number to call.

Common Questions