The construction and manufacturing sectors are the most likely to rely on credit to help pay for insurance, according to new analysis from Premium Credit.
Construction firms accounted for more than 8% of all net advances from Premium Credit last year, while the manufacturing sector made up 7%. This was followed by transport, professional and scientific services, and retail and wholesale. The five sectors together accounted for nearly a third (31%) of all net advances from Premium Credit.
Premium Credit’s data shows SMEs are increasingly borrowing to pay for insurance – total net advances of premium finance for commercial insurance increased by over 11% in 2020 compared with the previous year even though the number of policies only rose marginally.
Independent research conducted in April by Consumer Intelligence among 291 SMEs shows a similar trend, suggesting they are borrowing more to fund business insurance with owners most likely to rely on credit cards. Nearly one in four SME owners and managers who use credit increased the amount they borrowed in the past year, with average additional credit coming to nearly £1,300.
Image courtesy Siemens
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